Clyde Corp. is considering the purchase of a new piece of equipment. The equipment cost savings would result in an annual increase in cash flow of $101,400. The equipment will have an initial cost of $601,400 and will have a useful life of 8 years. The equipment has no salvage value. The critical rate is 9%. Ignore income taxes.

1. a. What is the accounting rate of return?
2. b. What is the payback period?
3. C. What is the net present value
4. d. What would the net present value be with a 14% critical rate of return?
5. e. Based on the NPV calculations, what range would the team's internal rate of return fall into?