Payback Period and Accounting Rate of Return: Equal Annual Operating Cash Flows with Disinvestment

Roopali is considering an investment proposal with the following cash flows:

Initial investment-depreciable assets $39,000

Initial investment-working capital 6,000

Net cash inflows from operations (per year for 6 years) 9,000

Disinvestment-depreciable assets 3,000

Disinvestment-working capital 2,000

For parts b. and c., round answers tothree decimal places, if applicable.

a. Determine the payback period.

b. Determine the accounting rate of return on initial investment

c. Determine the accounting rate of return on average investment