Comparison of approaches to capital budgeting. The Building Distributors Group is thinking of buying, at a cost of $264,000, some new packaging equipment that is expected to save $60,000 in cash operating costs per year. Its estimated useful life is ten years, and it will have zero terminal disposal price. The required rate ofreturn is 14%.

Required 1. Compute the payback period.

2. Compute the net present value.

3. Compute the internal rate ofreturn.

4. Compute the accrual accounting rate of return based on net initial investment. Assume straight-line amortization.