Carlos Reyes is considering the purchase of equipment for Business Solutions that would allow the company to add a new product to its computer furniture line. The equipment is expected to cost $300,000 and to have a six-year life and no salvage value. The equipment is expected to generate income of $12,939 and net cash flow of $62,939 in each year of its six-year life. Santana requires an 8% return on all investments. Required: 1. compute the payback period 2. compute the accounting rate of return 3. Compute the net present value.

Revelant time value of money factors

PV $1 (8%, 6 years) 0.0632

PVA $1 (8%, 6 years) 4.6229

PVAD $1 (8%, 6 years) 4.9927

FV $1 (8%, 6 years) 1.5869

FVA $1 (8%, 6 years) 7.3359

FVAD $1 (8%, 6 years) 7.9228