Vandezande Inc. is considering the acquisition of a new machine that costs $367,000 and has a useful life of 5 years with no salvage value. The incremental net operating income and incremental net cash flows that would be produced by the machine are (Ignore income taxes.):

	Incremental Net Operating Income			Incremental Net Cash Flows
Year 1	$	74,000		$	154,000
Year 2	$	80,000		$	159,000
Year 3	$	91,000		$	175,000
Year 4	$	54,000		$	156,000
Year 5	$	96,000		$	158,000

Assume cash flows occur uniformly throughout a year except for the initial investment.

The payback period of this investment is closest to:

Garrison 16e Rechecks 2017-11-15

Multiple Choice

• 3.5 years

• 5.0 years

• 4.7 years