Jack Huntley, a manager of the Plate Division for the Stone Ware Manufacturing company, has the opportunity to expand the division by investing in additional machinery costing $420,000. He would depreciate the equipment using the straight-line method and expects it to have no residual value. It has a useful life of 7 years. The firm mandates a required after-tax rate of return of 14% on investments. Jack estimates annual net cash inflows for this investment of $125,000 before taxes and an investment in working capital of $2,500 that will be returned at the project's end. Stone Ware's tax rate is 35%.

The net present value of this investment is:

The AARR is %.

Jack Huntley, a manager of the Plate Division for the Stone Ware Manufacturing company, has the opportunity to expand the division by investing in additional machinery costing $420,000. He would depreciate the equipment using the straight-line method and expects it to have no residual value. It has a useful life of 7 years. The firm mandates a required after-tax rate of return of 14% on investments. Jack estimates annual net cash inflows for this investment of $125,000 before taxes and an investment in working capital of $2,500 that will be returned at the project's end. Stone Ware's tax rate is 35%. Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Read the requirements Requirement 1. Calculate the net present value of this investment (Use factors to three decimal places, X.XXX, and round all currency calculations to the nearest whole dollar. Use a minus sign or parentheses for a negative net present value.) The net present value of this investment is: Requirement 2. Calculate the accrual accounting rate of return (AARR) based on net initial investment. (Round interim calculations to the nearest whole dollar. Round the rate to two decimal places, X.XX%.) The AARR is %