Helicopter Gear is planning to expand its product line, which requires investment of $560,000 in special-purpose machinery. The machinery has a useful life of seven years and no salvage value. The estimated annual results of offering the new products are as follows: Revenue $ 532,000 Expenses (Including straight-line depreciation) (504,800) Increase in net income $ 27,200

All revenue from the new products and all expenses (except depreciation) will be received or paid in cash in the same period as recognized for accounting purposes.

rev: 08_09_2012 28. Required information The payback period for this proposed investment is: 2.6 years. 7.0 years. 5.2 years. 10.3 years. 29. Required information The return on average investment for this proposed investment is closest to: 5.11%. 9.71%. 38.29%. 4.86%. 30. Required information Compute the net present value of this proposed investment, using a discount rate of 10%. (An annuity table shows that the present value of $1 received annually for seven years, discounted at 10%, is 4.868.) $107,200. $521,850. ($38,150). $452,800.