Adrian Sonnetson, the owner of Adrian Motors, is considering the addition of a paint and body shop to his automobile dealership.Construction of a building and the purchase of necessary equipment is estimated to cost $803,000, and both the building and equipment will be depreciated over 10 years using the straight-line method. The building and equipment have zero estimated residual value at the end of 10 years.Sonnetsons required rate of return for this project is 12 percent. Net income related to each year of the investment is as follows:

Revenue		$647,000
Less:
Material cost		69,100
Labor		152,000
Depreciation		80,300
Other		11,000
Income before taxes		334,600
Taxes at 40%		133,840
Net income		$200,760

1.Determine the net present value of the investment in the paint and body shop.

2.Calculate the payback period of the investment

3.Calculate the accounting rate of return