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Problem 10-22A (Algo) Effects of straight-line versus accelerated depreciation on an investment decision LO102,104 Stuart Electronics is considering investing in manufacturing equipment enpected to cost

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Problem 10-22A (Algo) Effects of straight-line versus accelerated depreciation on an investment decision LO102,104 Stuart Electronics is considering investing in manufacturing equipment enpected to cost 5350.000. The equlpment has an estimated beful life of four years and a salvage value of 522,000 it is expected to produce incremental cash revenues of 5175,000 per year. Stuart has an effectre income tax fate of 30 percent and a desired rate of return of 12 percent. (py of 51 and pyA of $1 ) (Use apprepriate tactor(s) from the tablet provided.) Reculted a. Determine the net present value and the present value index of the imvestrent, assuming that Stuart uses straightine depreciation for finarcinl and income tax reporteng. b. Determine the net present value and the present value index of the imwestrment, assuming that Stuart uses double-decining-balance depreciation for financial and income tax reporting d. Determine the payeack period and unedjusted rate of retum (use average imvestrent, assuming that Stuart uses straight-line depectation. e. Determine the pbybock period and unad)usted rate of return fuse average irvestrment. assuming that St vart uses double-decliningbolahce depreciatien. (Note Use aveibge antual cash fow when comquting the patyosck period and average anrual income when determining the unthusted rate of reburn) Cemplete this euestion by entering your answers in the tabs below. Deternine the net present value and the presecot value index of the imestment, assurving that tapper uses atraight kne te the nebrest whole doliar artaufit and veur answers for "Preseat valut infax" to 2 cecimal alsces.) Complete this question by entering your answers in the tabs below. Determine the payback perled and unadjusted rate of return (use average investment), assuming that Harper uses straightline depreciation and double-declining-balence depreciation. (Note: Use average annual cash flow when computing the payback period and average annual income when determining the unadjusted rate of return.) (Round your answers to 2 decimal places.)

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