Finch Electronics is considering investing in manufacturing equipment expected to cost $250,000. The equipment has an estimated useful life of four years and a salvage value of $ 20,000. It is expected to produce incremental cash revenues of $130.000 per year. Finch has an effective Income tax rate of 30 percent and a desired rate of return of 10 percent. PV of $1 and PVA of St (Use appropriate factors) from the tables provided.) Required a. Determine the net present value and the present value Index of the investment, assuming that Finch uses straight ne depreciation for financial and income tax reporting. b. Determine the net present value and the present value Index of the Investment, assuming that Finch uses double declining balance depreciation for financial and income tax reporting. d. Determine the payback period and unadjusted rate of retumuse average Investment), assuming that Finch uses straight-ne depreciation. e. Determine the payback period and unadjusted rate of retumuse average Investment, assuming that Finch uses double-declining-balance depreciation. (Note: Use average annual cash flow when computing the payback period and average annual Income when determining the unad usted rate of return.) X Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg A Reg D and B and E Determine the net present value and the present value index of the investment, assuming that Harper uses straight-line depreciation and double-declining-balance for financial and income tax reporting. (Round your answers for "Net present value to the nearest whole dollar amount and your answers for "Present value index" to 2 decimal places.) Show less Present present value value index $85.51x 1.33x $ 90,618 REDA and Reg D and E> Not 13 Finch Electronics is considering investing in manufacturing equipment expected to cost $250,000. The equipment has an estimated useful le of four years and a salvage value of $ 20.000 ts expected to produce incremental cash revenues of $130.000 per year. Finch has an effective income tax rate of 30 percent and a desired rate of return of 10 percent. PV of $1 and PVA of St (Use appropriate factor(s) from the tables provided.) Required a. Determine the net present value and the present value Index of the investment, assuming that Finch uses straight- ne depreciation for financial and income tax reporting. b. Determine the net present value and the present value index of the Investment, assuming that Finch uses double deciining-balance depreciation for inancial and income tax reporting d. Determine the payback period and unadjusted rate of retum (use average Investment, assuming that Finch uses straight ne depreciation e. Determine the payback period and unadjusted rate of retumuse average Investment, assuming that Finch uses double-declining-balance depreciation. (Note: Use average annual cash flow when computing the payback period and average annual income when determining the unad usted rate of return.) > Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. and E Reg A Reg D and B Determine the payback period and unadjusted rate of return (use average investment) assuming that Harper uses straight-line depreciation and double-declining-balance depreciation. (Note: Use average annual cash flow when computing the payback period and average annual income when determining the unadjusted rate of return.) (Round your answers to 2 decimal places.) Show less Payback Unadiusted period rate of return d. 2.38 x years 81.6 % 2.16 years 80.5 %
