Bi-Coastal Railroad Inc. is considering acquiring equipment at a cost of $520,000. The equipment has an estimated life of eight years and no residual value. It is expected to provide yearly net cash flows of $104,000. The companys minimum desired rate of return for net present value analysis is 10%.

a. The average rate of return, giving effect to straight-line depreciation on the investment. If required, round your answer to one decimal place. ____?______%

b. The cash payback period is 5 Years

c.The net present value. Use the above table of the The sum of the present values of a series of equal cash flows to be received at fixed intervals.present value of an annuity of $1. Round to the nearest dollar.

Present value of annual net cash flows	$______?________
Less amount to be invested	$520,000
Net present value	$________?______

Present Value of an Annuity of $1 at Compound Interest 6% 0.943 1.833 2.673 3.465 4.212 4.917 5.582 6.210 6.802 7.360 10% 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 1290 0.893 1.690 2.402 3.037 3.605 1590 0.870 1.626 2.283 2.855 3.353 3.785 4.160 4.487 4.772 5.019 20% 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 Year 2 4. 6 4.564 4.968 5.328 5.650 8 10