a) An investment project provides cash inflows of $865 per year for eight years. What is the project payback period if the initial cost

is $3,100? What if the initial cost is $4,300? What if it is $7,900?

b) Youre trying to determine whether or not to expand your business by building a new manufacturing plant. The plant has an installation cost of $10.8 million, which will be depreciated straight-line to zero over its four-year life. If the plant has projected net income of $1,293,000, $1,725,000, $1,548,000, and $1,310,000 over these four years, what is the projects average accounting return (AAR)?