1. Determine the cash payback period (Ignore income taxes).

2.Calculate the annual rate of return

3. Calculate the net present value assuming a 17% rate of return (Ignore income taxes)

4. Should the company purchase the new equipment?

Attempt History Current Attempt in Progress Kingbird Inc. is considering modernizing its production facility by investing in new equipment and selling the old equipment. The following information has been collected on this investment: Old Equipment New Equipment Cost $81,600 Cost $38.800 Accumulated depreciation $41.000 Estimated useful life 8 years Remaining life 8 years Salvage value in 8 years $4.800 Current salvage value $10.130 Annual cash operating costs $30,000 Salvage value in 8 years $0 Annual cash operating costs $36.000 Depreciation is $10.200 per year for the old equipment. The straight-line depreciation method would be used for the new equipment over an eight-year period with salvage value of $4.800. (a)