Flint Company is considering a capital investment of $190,700 in additional productive facilities. The new machinery is expected to have a useful life of 5 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $15,700 and $50,000, respectively. Flint has a 12% cost of capital rate, which is the required rate of return on the investment.

A) Compute the cash payback period.

Cash payback period _________ years

Compute the annual rate of return on the proposed capital expenditure.

Annual Rate of return __________ %

B) Using the discounted cash flow technique, compute the net present value.

Net present value __________