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Payback, Accounting Rate of Return, Net Present Value, Internal Rate of Return Follow the format shown in Exhibit 12B.1 and Exhibit 12B.2 as you complete
Payback, Accounting Rate of Return, Net Present Value, Internal Rate of Return Follow the format shown in Exhibit 12B.1 and Exhibit 12B.2 as you complete the requirements below. Blaylock Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of tractors. The outlay required is $384,000. The NC equipment will last 5 years with no expected salvage value. The expected after-tax cash flows associated with the project follow: Year 1 2 3 4 5 Required: Cash Revenues $510,000 510,000 510,000 510,000 510,000 Cash Expenses $360,000 360,000 360,000 360,000 360,000 A 1. Compute the payback period for the NC equipment. Round your answer to two decimal places. years 2. Compute the NC equipment's ARR. Round the percentage to one decimal place. Assume straight-line depreciation. %
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