Cash payback period = 5.404 years

Annual rate of return = 4.49%

Calculate the net present value assuming a 17% rate of return (Ignore income taxes). (If the net present value is negative, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5,275.)

Net present value

$

Problem 13-29A (Part Level Submission) Magna Inc. is considering modernizing its production facility by investing in new equipment and selling the old equipment. The following information has been collected on this investment. Old Equipment Cost Accumulated depreciation Remaining life Current salvage value Salvage value in 8 years Annual cash operating costs $80,960 $42,000 8 years $10,300 $0 $35,000 New Equipment Cost Estimated useful life Salvage value in 8 years Annual cash operating costs $38,400 8 years $4,512 $29,800 Depreciation is $10,120 per year for the old equipment. The straight-line depreciation method would be used for the new equipment over an eight-year period with salvage value $4,512