Each of the following scenarios is independent. All cash flows are after-tax cash flows.

1. Brad Blaylock has purchased a tractor for $91,250. He expects to receive a net cash flow of $28,750 per year from the investment. What is the payback period for Jim?

2. Bertha Lafferty invested $387,500 in a laundromat. The facility has a 10-year life expectancy with no expected salvage value. The laundromat will produce a net cash flow of $114,000 per year. What is the accounting rate of return?

3. Melannie Bayless has purchased a business building for $320,000. She expects to receive the following cash flows over a 10-year period:

Year 1: $46,500

Year 2: $58,000

Year 3-10: $82,000

What is the payback period for Melannie?

What is the accounting rate of return?