Remington Company is considering the purchase of some equipment.

The initial investment or cost will be$250,000.

The annual savings in cash operating costs are $80,000.

The estimated useful life of the equipment will be 5 years, at which point it will have a $10,000 terminal salvage value.

The company has a minimum desired rate of return of 14%.

Required:Compute the following:(10 pts.)

(1)The Payback Period.

(2)The Net Present Value.

(3)The Accounting Rate of Return.

(4) Indicate whether Remington Company should purchase the equipment.Explain why.