Problem $(10$ points$).$

The Connery Company is considering a capital investment for which the initial investment is $$20,000.$ Net annual cash inflows $($before income taxes$)$ are estimated to be $$3,500$ per year for $10$ years. The company calculates depreciation on a straight lime besis, using an estimated salvage value of zero.

REQUIRED: Using the attached forms and ignoring income taxes, compute the following items related to this capital investment. Round all dollar calculations to the nearest whole dollar, all peroentages to four decimal places, and all other calculations to two decimal places.

$(1)$ Payback period.

$(2)$ Accounting rate of return, using average investment.

$(3)$ Net present value, assuming a before tax cost of capital of $12$ percent.