Lauren Steel Company is considering investing in manufacturing equipment expected to cost $$160,000.$ The equipment has an estimated useful life of five years and a salvage value of $$40,000.$ It is expected to produce incremental cash revenues of $$64,000$ per year. Laurel has an effective income tax rate of $25$ percent and a desired rate of return of $10$ percent.

Required:

Round your financial figures to the nearest dollar and all other figures to two decimal points.

Determine the net present value and the present value index of the investment, assuming that Laurel Steel uses straight$-$line depreciation for financial and income tax reporting.

Determine the net present value and the present value index of the investment, assuming that Laurel Steel uses double$-$declining$-$balance depreciation for financial and income tax reporting.

Why do the net present values computed in Requirements a$)$ and b$)$ differ?

Determine the payback period and unadjusted rate of return $($use average investment$),$ assuming that Laurel Steel uses straight$-$line depreciation.

Determine the payback period and unadjusted rate of return $($use average investment$),$ assuming that Laurel Steel uses double$-$declining$-$balance depreciation. $($Note: Use average annual cash flow when computing the payback period and average annual income when determining the unadjusted rate of return.$)$

Why are there no differences in the payback period or unadjusted rate of return computed in Requirements d$)$ and e$)?$