Hayden Company Is Considering the Acquisition of a Machine That

question 80

Multiple Choice

Hayden Company is considering the acquisition of a machine that costs $675,000.The machine is expected to have a useful life of 6 years,a negligible residual value,an annual net cash flow of $150,000,and annual operating income of $87,500.What is the estimated cash payback period for the machine?

• A) 3.5 years
• B) 4 years
• C) 4.5 years
• D) 5 years

---

Definitions:

Expected Value

A calculated average outcome of a probabilistic event, considering all possible outcomes and their likelihoods.

Morphemes

The smallest meaningful units in a language, like roots, prefixes, or suffixes.

Winters

The coldest season of the year in polar and temperate zones, characterized by short days, long nights, and typically precipitation in the form of snow or rain.

Reading Span

A measure of working memory capacity, defined as the maximum number of sentences one can read while retaining the last word of each sentence for recall.