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Grouper Company is considering a capital investment of $355,100 in additional equipment. The new equipment is expected to have a useful life of 8 years
Grouper Company is considering a capital investment of $355,100 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 flows are expected to be $29,000 and $69,000, respectively. Grouper requires a 10% return on all new investments. Click here to view PV tables. (a) Compute each of the following: (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round cash payback period, profitability index and annual rate of return to 2 decimal places, e.g. 15.25 and other answers to 0 decimal places, e.g. 5,275.) 1. Cash payback period. 2. Net present value. 3. Profitability index. 4. Internal rate of return. 5. Annual rate of return. years $ % %
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