1.[The following information applies to the questions displayed below.] Peng Company is considering an investment expected to generate an average net income after taxes of $2,600 for three years. The investment costs $54,900 and has an estimated $10,500 salvage value.

Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. 2.

The following information applies to the questions displayed below.] Peng Company is considering an investment expected to generate an average net income after taxes of $2,600 for three years. The investment costs $54,900 and has an estimated $10,500 salvage value.

Assume Peng requires a 5% return on its investments. Compute the net present value of this investment. Assume the company uses straight-line depreciation. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign.)