2. A company is considering purchasing equipment to expand their business. The following information is available regarding the equipment.

Cost of equipment $100,000

Increase in annual contribution margin 30,000

Estimated life of the equipment 5 years

Required rate of return 8%

Compute net present value (using the present value table in the textbook), payback period (rounded to 2 decimal places), internal rate of return (using the interpolation method and percentage should be rounded to 2 decimal places), and accrual accounting rate of return based on the net initial investment (assuming the straight-line depreciation method is applied).

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