Roberts Company is considering an investment in equipment that is capable of producing more efficiently than the current technology. The outlay required is $1,638,000.

The equipment is expected to last five years and will have no salvage value. The expected cash flows associated with the project are as follows:

Required:
1. Compute the project’s payback period.
2. Compute the project’s accounting rate of return.
3. Compute the project’s net present value, assuming a required rate of return of 10 percent.
4. Compute the project’s internal rate of return.LO1

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-2375 Year Cash Revenues $2,129,400 Cash Expenses $1,638,000 2,129,400 1,638,000 2,129,400 1,638,000 4 2,129,400 1,638,000 2,129,400 1,638,000