Average Rate of Return, Cash Payback Period, Net Present Value Method for a Service Company

Present Value of an Annuity of $$1$ at Compound Interest

Compute the following:

a$.$ The average rate of return, giving effect to straight$-$line depreciation on the investment.

$\%$

b$.$ The cash payback period.

$$

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

Amount to be invested

Net present value

$!$

$4$