Return, and 9-7. Net Present Value, Intemal Pate of Return, Payback, Accounting Pate of the addition of [LO 1, 2,3] Adrian Sonnetion, the owner of Adrian Motors, is considering and the purchase of and body shop to his automobile dealership. Construction of a building : and equipment will becessary equipment is estimated to cost $800,000, and both the building equipment have zero depreciated over 10 years using the straight-line method. The building and return for this project is 12 persentual value at the end of 10 years. Sonnetsons required rate of return for this project is 12 percent. Net income related to each year of the investment is as follows: REQUIRED a. Determine the net present value of the investment in the paint and body shop. Should Sonnetson invest in the paint and body shop? b. Calculate the internal rate of return of the investment (epproximate). c. Calculate the payback period of the investment. d. Calculate the accounting rate of return. PROBLEM 9-8. Choosing among Alternative Investments [LO 1] Pronto Cleaners, a chain of dry cleaning stores, has the opportunity to invest in one of two dry cleaning machines. Machine A has a four-year expected life and a cost of $30,000. It will cost an additional $6,500 to have the machine delivered and installed, and the expected residual value at the end of 4 years is $4,000. Machine B has a 4-year expected life and a cost of $55,000. It will cost an additional $7,000 to have the machine delivered and installed, and the expected residual value at the end of four years is $6,000. Pronto has a required rate of return of 14 percent. Additional cash flows related to the machines are as follows