Ella's Bakery plans to purchase a new oven for its store. The oven has an estimated useful life of 4 years. The estimated pretax cash flows for the oven are as shown in the table that follows, with no anticipated change in working capital. Ella's Bakery has a 10% after-tax required rate of retum and a 38% income tax rate. Equipment is subject to a 20% CCA rate decining ba ance for Income tax purposes. (Click the icon to view the necessary assumptions) E (Click the icon to view the estimated cash flows for the oven) (Click the icon to view the present value of 51 factors.) Click the loon to view the present value of annuity of 51 factors.) Required . Requirement 1a. Calculate the net present value. (Use factors to three decimal places, XXXX, and use a minus sign or parentheses for a negative net present value. Enter the net present value of the investment rounded to the nearest whole dolar) The net present value is $ Requirement 1b. Calculate the payback period (Round your answer to two decimal places. The payback period is years. Requirement 2. Compare and contrast the capital Budgeting methods in requirement 1. Both the methods use a discounted cash flow approach in which of a project's expected future cash inflows and outfiows are measured as if they occurred at a single point. The method considers cash flows only up to the time when the expected future cash inflows recoup the net initial investment and it ignores profitability and the time value of money. Estimated cash flows -X More info Relevant Cash Flows at End of Each Year Assume depreciation is calculated on a straight line basis for accounting purposes using the initial investment in the oven and its estimated terminal disposal value. Assure all cash flows cocur at year-end except for initial investment amount. 0 4 $ (201,000) Initial oven investment Annual cash flows from operations (excluding the depreciation effect) Cash flow from terminal disposal of oven $ 79,000 $ 79,000 79,000 S 79,000 S S Print Done 0 Print Done Clear all Check