Carper Company is considering a capital investment of $378,400 in additional productive facilities. The new machinery is expected to have useful life of 6 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $18,920 and $86,000, respectively. Carper has an 7% cost of capital rate. which is the required rate of return on the investment. (a1)