Nash is considering introducing a new fad toy, Topico. The new product is expected to generate annual revenue of $524,000, with direct materials cost of $184,000, direct labour $160,000, and overhead cost of $104,000. In order to produce Topico, Nash will need to purchase new equipment costing $301,000. The equipment will be used for 5 years, as Nash expects that interest in the toy will be stopped by then. The equipment will have no residual value after 5 years. To insure a smooth operation, Nash expects that the project will increase working capital by $7,000 at the beginning, which will be recovered at the end of the five years. In addition, it will cost Nash $7,000 to remove the equipment and clean up the facility. Nashs policy is to accept investment projects that have a 3-year payback period. Nashs required rate of return is 6%.

1. What is the net present value for this investment?

2. What is the internal rate of return for this investment?

3. What is the accrual accounting rate of return?