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Please help me solve questions (a) & (b). Thank you so much !!! Question 5 of 7 - / 4.6 iii Wildhorse Company is considering
Please help me solve questions (a) & (b). Thank you so much !!!
Question 5 of 7 - / 4.6 iii Wildhorse Company is considering a capital investment of $203,500 in additional productive facilities. The new machinery is expected to have a useful life of 5 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $15,873 and $55,000, respectively. Wildhorse has a 12% cost of capital rate, which is the required rate of return on the investment. Click here to view PV table. (a) Compute the cash payback period. (Round answer to 1 decimal place, e.g. 10.5.) Cash payback period years Compute the annual rate of return on the proposed capital expenditure. (Round answer to 2 decimal places, e.g. 10.52%.) Annual rate of return % (b) Using the discounted cash flow technique, compute the net present value. (If the net present value is negative, use either a negative sign preceding the number eg.-45 or parentheses eg. (45). Round answer for present value to 0 decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Net present valueStep by Step Solution
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