Problem 13.50 Bonita is considering introducing a new fad toy, Topico. The new product is expected to generate annual revenue of $521,000, with direct materials cost of $181,000, direct labour $157,000, and overhead cost of $105,000. In order to produce Topico, Bonita will need to purchase new equipment costing $298,000. The equipment will be used for 5 years, as Bonita expects that interest in the toy will be stopped by then. The equipment will have no residual value after 5 years. To insure a smooth operation, Bonita expects that the project will increase working capital by $9,000 at the beginning, which will be recovered at the end of the five years. In addition, it will cost Bonita $9,000 to remove the equipment and clean up the facility. Bonita's policy is to accept investment projects that have a 3-year payback period. Bonita's required rate of return is 7%. What is the payback period for this investment? (Round answer to 2 decimal places, e.g. 1.25.) Payback Period years What is the net present value for this investment? (Round entry to 2 decimal places, e.g. 5,275.64. Show a negative amount preceded by a minus sign e.g. -5,000.68 or (5,000.68). Use Time Value of Money Table values to 4 decimals, e.g. 0.5823.) Net present value $ What is the internal rate of return for this investment? (Round answer to 4 decimal places, e.g. 1.2564%.) Internal rate of return % What is the accrual accounting rate of return? (Round answer to 2 decimal places, e.g. 1.25%.) Accrual Accounting Rate of Return % By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor. Question Attempts: 0 of 15 used