1.

Average Rate of Return

Determine the average rate of return for a project that is estimated to yield total income of $436,500 over three years, has a cost of $892,400, and has a $77,600 residual value. Round to the nearest whole number. %

2.

Cash Payback Period

A project has estimated annual net cash flows of $29,000. It is estimated to cost $101,500.

Determine the cash payback period. If required, round your answer to one decimal place. years

3.

Net Present Value

A project has estimated annual net cash flows of $15,000 for four years and is estimated to cost $45,000. Assume a minimum acceptable rate of return of 12%. Use the Present Value of an Annuity of $1 at Compound Interest table below.

Present Value of an Annuity of $1 at Compound Interest
Year	6%	10%	12%	15%	20%
1	0.943	0.909	0.893	0.870	0.833
2	1.833	1.736	1.690	1.626	1.528
3	2.673	2.487	2.402	2.283	2.106
4	3.465	3.170	3.037	2.855	2.589
5	4.212	3.791	3.605	3.353	2.991
6	4.917	4.355	4.111	3.785	3.326
7	5.582	4.868	4.564	4.160	3.605
8	6.210	5.335	4.968	4.487	3.837
9	6.802	5.759	5.328	4.772	4.031
10	7.360	6.145	5.650	5.019	4.192

Determine (a) the net present value of the project and (b) the present value index. If required, use the minus sign to indicate a negative net present value.

Net present value of the project (round to the nearest dollar)	$
Present value index (rounded to two decimal places)