Beyer Company is considering the purchase of an asset for $370,000. It is expected to produce the following net cash flows. The cash flows occur evenly throughout each year.

	Year 1				Year 2				Year 3				Year 4				Year 5				Total
Net cash flows		$	86,000			$	49,000			$	70,000			$	300,000			$	12,000			$	517,000

Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal places.)

A machine costs $200,000 and is expected to yield an after-tax net income of $5,000 each year. Management predicts this machine has a 11-year service life and a $40,000 salvage value, and it uses straight-line depreciation. Compute this machines accounting rate of return.

B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $380,800 with a 10-year life and no salvage value. It will be depreciated on a straight-line basis.The company expects to sell 152,320 units of the equipments product each year. The expected annual income related to this equipment follows. If at least an 8% return on this investment must be earned, compute the net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Sales	$	238,000
Costs
Materials, labor, and overhead (except depreciation on new equipment)		83,000
Depreciation on new equipment		38,080
Selling and administrative expenses		23,800
Total costs and expenses		144,880
Pretax income		93,120
Income taxes (40%)		37,248
Net income	$	55,872

Compute the net present value of this investment.

Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $511,000 cost with an expected four-year life and a $23,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (FV of $1, PV of $1, FVA of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)

Expected annual sales of new product	$	1,920,000
Expected annual costs of new product
Direct materials		485,000
Direct labor		679,000
Overhead (excluding straight-line depreciation on new machine)		335,000
Selling and administrative expenses		144,000
Income taxes		30	%

Required:
1.	Compute straight-line depreciation for each year of this new machines life.

2.	Determine expected net income and net cash flow for each year of this machines life.

3.	Compute this machines payback period, assuming that cash flows occur evenly throughout each year.

4.	Compute this machines accounting rate of return, assuming that income is earned evenly throughout each year.

5.	Compute the net present value for this machine using a discount rate of 7% and assuming that cash flows occur at each year-end. (Hint: Salvage value is a cash inflow at the end of the assets life.) (Do not round intermediate calculations.)