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

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Definitions:

Hydrogen Sulfide

A toxic, foul-smelling gas, H2S, often associated with volcanic gases and the decomposition of organic matter.

Abyssal Plane

A flat, almost level area of the deep ocean floor, usually lying at depths between 3,000 and 6,000 meters.

Seismic-Reflection Profiling

A geophysical method used to explore subsurface structures by sending sound waves into the ground and analyzing the reflected waves to map geological features.

Seismic-Reflection Profile

A cross section plotting data gathered from a seismic-reflection survey.