1. Peet's Corp is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $100,000. The equipment will have an initial cost of $450,000 and have a 5 year life. If the salvage value of the equipment is estimated to be $75,000, what is the payback period? Ignore income taxes. A. 3.25 years B. 4.00 years C. 4.50 years D. 7.00 years 2. Wright Corp. is considering the purchase of a new piece of equipment, which would have an initial cost of $1,000,000 and a 5-year life. There is no salvage value for the equipment. The increase in cash flow each year of the equipment's life would be as follows: Year 1 Year 2 Year 3 Year 4 Year 5 $ 375,000 $ 350,000 $ 285,000 $ 230,000 $ 185,000 What is the payback period? A. 2.96 years B. 2.39 years C. 3.00 years D. 3.51 years 3. Hiawatha Corp is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $200,000. The equipment will have an initial cost of $900,000 and have a 6 year life. There is no salvage value for the equipment. If the cost of capital is 7%, what is the approximate net present value? Ignore income taxes. A. $53,300 B. S24,580