Average Rate of Return, Cash Payback Period, Net Present Value Method Cross Country Railroad Inc. is considering acquiring equipment at a cost of $210,000. The equipment has an estimated life of 10 years and no residual value. It is expected to provide yearly net cash flows of $42,000. The company's minimum desired rate of return for net present value analysis is 15%. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 3.837 8 6.210 5.335 4.968 4.487 9 6.802 5.759 4.772 14.031 5.328 5.650 10 7.360 6.145 5.019 4.192 Compute the following: a. The average rate of return asuming the annual earnings an equal to the net cash flows less the annual deprecation expense of the equipment. If required, round your answer to one decimal place. b. The cash bayback period 1.780 13090 T9020 . 3 2.673 2.487 2.283 2.106 2.402 3.037 4 3.463 2.855 2.589 3.170 3.791 5 4.212 3.605 3.353 2.991 6 4.917 -4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 B 6.210 5.335 4.968 4.487 3.837 4.031 9 6.802 5.759 4.772 5.328 5.650 10 7.360 6.145 5.019 4.192 Compute the following: a. The average rate of return, assuming the annual caminos are equal to the net cash flows less the annual depredation expense on the equipment. If required, round your answer to one decimal place, b. The cash payback period years c. The net present value. Use the above table of the present value of an annuity of $1. Round to the nearest dollar Present value of annual net cash flows Less amount to be invested Net present value