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Kansas Corporation is reviewing an investment proposal that has an initial cost of $82,500. An estimate of the investment's end-ofyear book value, the yearly after-tax
Kansas Corporation is reviewing an investment proposal that has an initial cost of $82,500. An estimate of the investment's end-ofyear book value, the yearly after-tax net cash inflows, and the yearly net income are presented in the schedule below. Yearly after-tax net cash inflows include savings from the depreciation tax shield. The investment's salvage value at the end of each year is equal to book value, and there will be no salvage value at the end of the investment's life. Kansas uses a 14% after-tax target rate of return for new investment proposals. Required: A. Calculate the project's payback period. (Do not round intermediate calculations.) B. Calculate the accounting rate of return on the initial investment. (Do not round intermediate calculations. Round your answer to 1 decimal place.) C. Calculate the proposal's net present value. (Do not round intermediate calculations. Round your final answer to nearest dollar amount.)
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