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Average Rate of Return, Cash Payback Period, Net Present Value Method Southwest Transportation Inc. is considering a distribution facility at a cost of $248,000. The facility has an estimated life of 10 years and a no residual value. It is expected to provide yearly net cash flows of $62,000. The company's minimum desired rate of return for net present value analysis is 12%. Click here to access the present value tables (Exhibit 2 and Exhibit 5) to use for this problem. a. Compute average rate of return, giving effect to straight-line depreciation on the investment. Round to one decimal place. x \% b. Compute the cash payback period. years c. Compute the net present value. If requirt, use the minus to indicate a negative net present value. Feedback Check My Work a. Divide the estimated average annual income by the average investment. Net cash flow less the annual depreciation expense equals average annual income. Investment cost divided by two equals average investment. b. Divide the initial cost by the annual net cash flow. c. Subtract the amount to be invested from the sum of present value of the annual net cash flow and present value of residual value. (Use the present value of an annuity factor for 10 periods at 12%.) 7 more Check My Work uses remaining