File Edit View Insert Format Tools Data Window Help AutoSave OF Aby 50= Ch 12 Homework Auto Save OFF Final Exam Home Insert Draw Page Layout Formulas Data Review View Developer Arial 10 A ab General CA Paste BI UV $ ~ % " 0O Recover Unsaved Workbooks. We were able to save changes to one or more files. Do you want to recover them? A1 " XV fx A B C D E F G H Q5: CPP Company is considering a new investment proposal with a 15-year useful life. What is the payback period if the initial investment is $498,000 with expected after-tax net cash flow of $83,000 and after-tax net income of $50,000? Should this investment be pursued? 69 70 a. Calculate the payback period 71 72 Payback period = 73 74 75 76 77 78 79 b. Should we purchase this investment? Why or Why not? 80 81 82 83 Q6: Jolly Holiday Company is considering investing $53,000 in a new machine. The machine is expected to last 5 years and to have a salvage value of $2,000. The straight-line method of depreciation is used. Annual after-tax net cash flow from the machine is expected to be 84 $11,000. Round depreciation to nearest DOLLAR. 85 a. Calculate Annual Straight-line depreciation 86 87 Annual depreciation = 88 + 89 90 b. Calculate After-tax net income 91 92 After tax net income = 93 94 95 c. Calculate the Average Investment 96 97 Average Investment = 98 99 100 d. Calculate the Accounting (or Unadjusted) Rate of Return Exam Settings + 9,743 DEC 32 16Excel File Edit View Insert Format Tools Data Window Help AutoSave OFF Aby 5 0= ch AutoSave OFF Fi Home Insert Draw Page Layout Formulas Data Review View Developer Arial 10 ab General Paste I UV FE $ Recover Unsaved Workbooks. We were able to save changes to one or more files. Do you want to recover them? A1 4 X V fox A B D E F AC Q6: Jolly Holiday Company is considering investing $53,000 in a new machine. The machine is expected to last 5 years and to salvage value of $2,000. The straight-line method of depreciation is used. Annual after-tax net cash flow from the machine is exp $11,000. Round depreciation to nearest DOLLAR. 84 85 a. Calculate Annual Straight-line depreciation as 86 87 Annual depreciation = 88 89 90 b. Calculate After-tax net income 91 92 After tax net income = 93 94 95 c. Calculate the Average Investment 96 97 Average Investment = 98 99 100 d. Calculate the Accounting (or Unadjusted) Rate of Return 101 102 Accounting Rate of Retum = 103 i 104 105 106 107 e. Explain what the Accounting or Unadjusted Rate of Return tells you about this company 108 St 109 110 111