Di Lucal Paysack Period, Net Present Value Method Bi-Coastal Railroad Inc. is considering acquiring equipment at a cost of $165,000. The equipment has an estimated life of 10 years and no residual value. It is expected to provide yearly net cash flows of $33,000. The company's minimum desired rate of return for net present value analysis is 12%. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 3.170 3.037 2.855 2.589 3.865 4.212 5 3.791 3.605 2.991 3.353 3.785 6 4.917 4.355 4.111 3.326 5.582 7 4.868 3.605 4.160 6.210 5.335 8 4.564 4.968 5.328 4.487 3.837 5.759 4.772 4.031 6.802 9 4.192 5.019 5.650 6.145 7.360 10 Compute the following: a. The average rate of return, assuming the annual earnings are equal to the net cash flows less the annual depreciation expense on the equipment required, round your answer to one decimal place. 9 Previous Next) b. The cash payback period. wres remaining for Grading 4. 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 B 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Compute the following: a. The average rate of return, assuming the annual earnings are equal to the net cash flows less the annual depreciation expense on the equipment. It required, round your answer to one decimal place. % b. The cash payback period. years c. The net present value. Use the above table of the present value of an annuity of $1. Round to the nearest dollar. If required, useam to indicate event present value for current grading purpose. Present value of annual net cash flows Less amount to be invested Net present value Previous