1. Jacobs Company is considering investing in new equipment that will cost $1,200,000 with a 8-year useful life. The new equipment is expected to produce annual net income of $95,000 over its useful life. Depreciation expense, using the straight-line rate, is $135,000 per year. Instructions Compute the cash payback period. 2. Lake Company is considering investing in a new truck that will cost $50,000. The company expects to use the truck for 5 years, after which it will be sold for $10,000. Lake anticipates annual cash flows of $11,000 resulting from the new truck. The company's borrowing rate is 8%, while its cost of capital is 10%. Instructions Calculate the net present value of the truck and indicate whether Lake should make the investment