Pack & Carry is debating whether to invest in new equipment to manufacture a line of high-quality

Question:

Pack & Carry is debating whether to invest in new equipment to manufacture a line of high-quality luggage. The new equipment would cost $960,000, with an estimated eight-year life and no . The estimated annual operating results with the new equipment are as follows.
Revenue from sales of new luggage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $660,000
Expenses other than depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . $240,000 .................
Depreciation (straight-line basis) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000 . . . . . 360,000
Increase in net income from the new line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $300,000
All revenue from the new luggage line and all expenses (except depreciation) will be received or paid in cash in the same period as recognized for accounting purposes. You are to compute the following for the investment in the new equipment to produce the new luggage line.
a. Annual cash flows.
b. Payback period.
c. Return on average investment.
d. Total present value of the expected future annual cash inflows, discounted at an annual rate of 20 percent.
e. of the proposed investment discounted at 20 percent?
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