ABC Company is considering the purchase of a new machine that would cost $1,000,000. The machine would have a useful life of 10 years. ABC Company plans on using straight-line depreciation with an estimated salvage value of 50 . ABC Company has a hurdle rate of 14% and is subject to an income tax rate of 60%. The annual cash income is estimated to be $400,000. PV TABLES CAN BE FOUND ON PAGE 11 3. The Accounting Rate of Return (AROR) is: A. 14% B. 12% C. 10% D. 16% 4. The Net Present Value (NPV) is: A. $147,520 B. $146,520 C. $148,520 D. $145,520 5. The Payback period is: A. 3.9 years B. 4.2 years C. 4.5 years D. 4.8 years 6. Using interpolation, the Internal Rate of Return (IRR) is: A. 16.8% B. 17.1% C. 17.4% D. 17.7%