Average Rate of Return, Cash Payback Period, Net Present Value Method for a Service Company Spanish Peaks Railroad Inc. is considering acquiring equipment at a cost of $260,000. The equipment has an estimated life of 10 years and no residual value. It is expected to provide yearly net cash flows of $65,000. The company's minimum desired rate of retum for net present value analysis is 12% Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.833 0.870 1626 2 1.833 1.528 1.736 2.487 3 1.690 2.402 3.037 2283 2.673 3.465 21106 4 3.170 2.855 2.589 5 4.212 3.791 3.353 2.991 3.605 4.111 6 4.917 3.785 3326 4.355 4.568 7 5:582 4.564 4.160 3.605 B 6.210 5.335 4.487 3.637 4.031 9 6.802 4.968 5.328 5.650 5.759 6.145 4.772 5.019 10 7.360 4.192 Compute the following Compute the following: a. The average rate of retum, giving effect to straight-line depreciation on the investment required, round your answer to one oecimal place. b. The cash payback period. 6. The net present value. Use the above table of the tent value of any of $1. Round to the nearest Groquired, use a minuto indicate the present value for current grading purpose Present value of annual net cash flows Amount to be invested Net present value