Payback comparisons Nova Products has a 5-year maximum acceptable payback period. The firm is considering the purchase of a new machine and must choose between two alternatives. The first machine requires an inital investment of $37,000 and generates annual cash inflows of $7,000 for each of the next 8 years. The second machine requires an inital investment of $46,000 and provides an annuad cash inflow of $9,000 for 20 years. a. Dotermine the payback period for each machine. b. Comment on the acceptabiity of the machines, assuming that they are independent projects. c. Which machine should the firm buy? Wry? d. Does this problem illustrate any of the payback method's weaknesses? a. The payback period for the first machine is years. (Round to two decimal places.) The payback period for the second machine is years. (Round to two decimal places.) b. Is the first machine acceptable? (Select the best answer below.) Yes No Is the second machine acceptable? (Select the best answer below.) No Yes c. Based on their payback periods, which machine strould the firm accept? (Select the best answer below.) A. Machine 1 8. Nenther C. Machine 2 d. Does this probiem illustrale any of the payback method's weaknesses? (Seloct the best answer below.) A. Machine 2 has returns that last 20 years while Machine 1 has only 8 years of returns. Payback cannot consider this difference; it ignores all cash inflows beyorvd the payback period. B. Machine 2 has returns that last 20 years while Machine 1 has only 8 years of coturns. Paybock considers only the first 8 years for each machine. c. Machine 2 has returns that last only 8 years while Machine 1 has 20 years of roturns. Payback cannot consider this difference; it ignores all cash inflows beyond the payback period D. Machine 2 has returns that last 20 yoars while Machine 1 has only 8 yoars of roturns. Payback considers this differmce, it includes al cash inflows beyond the payback period