Evaluating a project by the payback period, payback reciprocal, time-adjusted rate of return, and rate of return on initial investment. The Levy Corporation has an opportunity to expand its production by buying a new machine at a cost of $400,000. The machine has an estimated useful life of 4 years, would be depreciated under the straight-line method, and is expected to have no salvage value. The machine would add $160,000 per year in net cash flow after taxes.

Instructions 1. Compute the payback period.
2. Compute the payback reciprocal.
3. Compute the time-adjusted rate of return (to the nearest whole percent). (Use the table on page 556.)
4. Compute the rate of return on the initial investment (to the nearest tenth of a percent).