Flounder Company is considering a capital investment of $349,900 in additional equipment. The new equipment is expected to have a useful life of 8 years with no salvage value. Depreciation is computed by the straight-line method. During the life of the investment, annual net income and cash flow are expected to be $28,000 and $68,000, respectively. Flounder requires a 10% return on all new investments.

Present Value of an Annuity of 1
Period	8%	9%	10%	11%	12%	15%
8	5.74664	5.53482	5.33493	5.14612	4.96764	4.48732

Compute each of the following

1. Cash payback period. ______years

2. Net present value. $_______

3. Profitability index. _______

4. Internal rate of return. _______%

5. Annual rate of return. _______%