Answer part B and C

Question 1: Evaluating investment projects You are planning to invest $100,000 in new equipment. This investment will generate net cash flows of $60,000 a year for the next 2 years. The salvage value after 2 years is zero. The cost of capital is 25% a year a) Compute the net present value NPV $13600 Enter negative numbers with a minus sign, ie.,-100 not ($100) or (100). Should you invest? Why? O YES the NPV is positive, which indicates that the investment is profitable O YES the NPV is negative, which indicates that the investment will reduce costs O NO the NPV is negative, which indicates that the investment is unprofitable b) Compute the payback period. payback period x years c) Compute the accounting rate of return (ARR). To compute ARR, first compute annual depreciation 50000 annual income=$ 1000 average investment-$x x% ARR If your answer is 10%, enter 10 without the percent sign