Exercise 26.8

Analyzing a Capital Investment Proposal Revenue from sales of industrial distilling vats Expenses other than depreciation Depreciation (straight-line basis) . Increase in net income from industrial distilling vats a. Annual cash flows. b. Payback period. c. Return on average investment. d. Total present value of the expected future annual cash inflows, discounted at an annual rate of 20 percent. e. Net present value of the proposed investment discounted at 20 percent. Exercise 26.8 a. b. c. d. e