PAATIV-CAPITAL BUDGETING (20 points) Shangria Company is considering a capital investment of $140,000 in new equipment, which is expected to have a useful lfe of 4 years with no salvage value. Depreciation is computed by the straight-line method. During the life of the investment, annual net income and cash inflows are expected to be $10,000 and $45,000, respectively. Shangria requires either a 10% rate of return, or a payback period of 3 years. Instructions: Compute the (a) annual rate of return, (b) cash payback period, (c) net present value, (d) profitability index, and (e) internal rate of return. Show all computations. State whether the project should be accepted or rejected for each of the five capital budgeting techniques. Present Value of a Series of Future Payments 1 0.980 0.98 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 2 1.970 1.942 1.914 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.713 1.690 1.668 3 2.941 2.884 2.829 2.775 2.723 2673 2.624 2.577 2.531 2.487 2.444 2.402 2.361 4 3.902 3.808 3.717 3.630 3.548 3.485 3.387 3.312 3.240 3.170 3.102 3.037 2.975 5 4.853 4.714 4.580 4.452 4.330 4.212 4.100 3.993 3.89 3.791 3.696 3.605 3.517 (a) Annual Rate of Return (b) Cash Payback Period- (c) Net Present Value- (d) Profitability Index- (e Intermal Rate of Return