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Crescendo is considering producing CD players and digital video recorders (DVRs). The products require different specialized machines, each costing $1.1 million. Each machine has a 5-year life and zero residual value. The two products have different patterns of predicted net cash inflows: (Click the icon to view the predicted cash inflows.) Calculate the DVR project's payback period. If the DVR project had a residual value of $200,000, would the payback period change? Explain and recalculate if necessary. Does this investment pass Crescendo's payback period screening rule? Calculate the DVR project's payback period. First, enter the formula, then calculate the payback period. (Round your answer to two decimal places.) Full years + Amount to complete recovery in the next year / Projected cash inflow in the next year) = Payback - years If the DVR project had a residual value of $200,000, would the payback period change? Explain and recalculate if necessary. affected. The cash inflow from any residual value would occur the asset's useful operating life and taken into account when calculating the If the investment had a $200,000 residual value, the payback period payback period. The payback period if the DVR project had a residual value of $200,000 is years. (Round your answer to two decimal places.) Does this investment pass Crescendo's payback period screening rule? The payback period is 3.5 years, so it Crescendo's initial screening. * Data Table - X Year 1 2 Annual Net Cash Inflows CD Players DVRs $ 371,500 $ 520,000 371,500 375,000 371,500 320,000 371,500 260,000 371,500 25,000 $ 1,857,500 $ 1,500,000 3 4 5 Total Crescendo will consider making capital investments only if the payback period of the project is less than 3.5 years and if the ARR exceeds 8%. Print Done