Ayayai Company is considering a capital investment of $$309,600$ in additional productive facilities. The new machinery is expected to

have a useful life of $5$ years with no salvage value. Depreciation is computed by the straight$-$line method. During the life of the

investment, annual net income and cash flows are expected to be $$28,000$ and $$90,000,$ respectively. Ayayai has a $12\%$ cost of capital

rate, which is the minimum acceptable rate of return on the investment.

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$($a$)$

Compute the annual rate of return. $($Round answer to $1$ decimal place, e$.$g$.15\mathrm{.}5.)$

Annual rate of return

Compute the cash payback period on the proposed capital expenditure. $($Round answer to $2$ decimal places, e$.$g$.15\mathrm{.}25.)$

Cash payback period

years

$($b$)$

Your answer is incorrect.

Using the discounted cash flow technique, compute the net present value. $($Use the above table.$)($Round factor values to $5$

decimal places, e$.$g$.1\mathrm{.}25124$ and final answer to $0$ decimal places, e$.$g$.5,275.)$

Net present value $