Toy World Products is considering producing toy action figures and sandbox toys. The products require different specialized machines, each costing $1.1 million. Each machine has a five-year life and zero residual value. The two products have different patterns of predicted net cash inflows: :: (Click the icon to view the data.) Calculate the sandbox toy project's payback period. If the sandbox toy project had a residual value of $150,000, would the payback period change? Explain and recalculate if necessary. Does this investment pass Toy World's payback period screening rule? Calculate the sandbox toy project's payback period. First, enter the formula, then calculate the payback period. (Enter amounts in dollars, not millions. Round your answer to two decimal places. Abbreviation used: Amt. = Amount.) + ) = Payback ) = years the asset's useful operating life and If the sandbox toy project had a residual value of $150,000, would the payback period change? Explain and recalculate if necessary. If the investment had a $150,000 residual value, the payback period Vaffected. The cash inflow from any residual value would occur taken into account when calculating the payback period. (Round your answer to two decimal places.) Data Table The payback period if the sandbox toy project had a residual value of $150,000 is years Does this investment pass Toy World's payback period screening rule? The payback period is 3.5 years, so it Toy World's initial screening Year Year 1 Annual Net Cash Inflows Toy action figure Sandbox toy project project 317,750 $ 520,000 317.750 375,000 317,750 310,000 317,750 230,000 317,750 30,000 Year 2 Year 3 Year 4 Year 5 $ 1,588,750 $ 1,465,000 Total Toy World will consider making capital investments only if the payback period of the project is less than 3.5 years and the ARR exceeds 8%. Print Done