12pp1

Bob Jensen Inc purchased a $640,000 machine to manufacture specialty taps for electrical equipment. Jensen expects to sell all t can manufacture in the next 10 years. To encourage capital investments, the government has exempted taxes on profits from new investments. This legislation is to be in effect for the foreseeable future. The machine is expected to have a 10-year useful life with no salvage value. Jensen uses straight-line depreciation. Jensen uses a 10% discount rate in evaluating capital investments, the investment is subject to taxes, and the projected pretax operating cash inflows are as follows: 1 64,808 79,8ee 3 119,800 4 198,eee 238,890 6 298,88 7268,808 8238,8e0 119,ee0 18 79,88e Jensen has been paying 25% for combined federal, state, and local income taxes, a rate that is not expected to change during the period of this investment. The firm uses straight-line depreciation. Assume, for simplicity, that MACRS depreciation rules do not apply Required: Using Excel, compute the following for the proposed investment 1 The payback period, under the assumption that the cash infiows occur evenly throughout the year. (Do not round Intermedlate colculations. Round your final answer to 1 decimal place.) 2 The accounting (book) rate of return based on (a) initial investment, and (b) average investment (Round your final answers to 1 decimal place.) 3. The net present value (NPV) (Do not round Intermediate colculations. Round your final answer to nearest whole doller amount.) 4. The present value payback period of the proposed investment under the assumption that the cash inflows occur evenly throughout the year. (Note: use the formula at the bottom of AgpendxC Table 1 to calculate present value factors.) (Do not round Intermedlate calculetions. Round your final enswer to 2 declmal places.) 5. The internal rate of return (IRR). (Do not round Intermedlate calculations Round your final answer to 1 decimal place.)