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Accounting

Problem:

Hazard Company is considering the acquisition of a machine that costs $375,000. The machine is expected to have a useful life of 6 years, a negligible residual value, an annual cash flow of $150,000, and annual operating income of $87,500.

Required:

Question: What is the estimated cash payback period for the machine?

Select one:

a. 3 years

b. 4.3 years

c. 2.5 years

d. 5 years

Note: Please show the work not just the answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91165187

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