w Averace Rate of Retum, Cash Payback period, Net Present Value Method for a Service Company Spanish Peaks Rotead Inc. is considering acquiring equipment at a cost of $204,000. The equipment has an estimated Wife of 10 years and no residual value. It is expected to provide yearly net cash flows of $51,000. The company's minimum desired rate of return for net present value analysis is 129 Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.633 1.736 1.690 1.626 1.528 3 2673 2.187 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.552 4.568 4.564 4.160 3.505 8 6.210 5335 4.968 4487 3.837 9 6,502 5.759 5328 4.772 4.031 10 72360 6.145 5 650 5,019 4.192 Compute the following a. The average rate of return, ging effect to straight line depreciation on the investment. It required, round your answer to one decimal place. b. The cash payback period years c. The net present value. Use the above table of the present value of an annuty of 51. Round to the nearest dolac If required, use a minus sign to indicate negative net present value for current grading purpose Present value of annual net cashows Amount to be invested Check My Work 1 Average rate of Return, Cash Payback Period, Net Present Value Method for a Service Company Spanish Peaks Railrond Inc. is considering acquiring equipment at a cost of $204,000. The equipment has an estimated life of 10 years and no residual value. It is expected to provide yearty net cash flows of $51,000. The company's minimum desired rate of return for net present value analysis is 12%. Present Value of an Annuity of $1 at Compound Interest Year 10% 12% 15% 20% 0.943 0.909 0.893 0.833 1.736 1.626 1.528 2.887 2.402 2.855 2.589 4.212 3.791 3.353 2.991 4.917 3.785 3.326 5-502 4.564 0.870 2 1.833 1.690 3 2.673 2.283 2.106 4 3.465 3.170 3.037 S 3.605 6 4355 4 868 4.160 3.605 8 6.210 5.335 4.968 4,487 9 5.802 5.759 4.772 4.031 5.328 5.650 10 7.360 6.145 5.019 4.192 Compute the fotoning: 2. The average rate of return, ging effect to straight-line depreciation on the investment. If required, round your answer to one decimal place. b. The cash payback period 4 years c. The net persent value. Use the above table of the present value of an annuity of 51. Round to the nearest dollar. If required, use a minus sign to indicate negative net present value for current grading purpose Present value of annual net cash flows Amount to be invested
