Santana Rey is considering the purchase of equipment for Business Solutions that would allow the company to add a new product to its computer furniture line. The equipment is expected to cost $367,000 and to have a six-year life and no salvage value. The equipment is expected to generate income of $26,639 and net cash flow of $79,739 in each year of its six-year life. Santana requires an 9% return on all investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) (Negative net present values should be indicated with a minus sign. Do not round intermediate calculations. Round your present value factor to 4 decimals and final answers to the nearest whole number.) Required: 1-a. Compute the payback period for this equipment. 1-b. Compute the net present value for this equipment. 1-c. Compute internal rate of return for this equipment. 2. If Santana requires investments to have payback periods of four years or less, should she invest in this equipment? 3. If Santana requires investments to have at least an 9% internal rate of return, should she invest in this equipment?

Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 1c Reg 2 and 3 Compute the payback period for this equipment. Payback Period Denominator: Numerator: = Payback Period = Payback period Accounts receivable Annual net cash flow Average total assets Cost of goods sold Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 1C Reg 2 and 3 Compute the net present value for this equipment. Cash Flow Select Chart Net Cash Flows X Present Value of Annuity at 9% Present Value of Net Cash Flows $ Annual cash flow 0 = Present Value of 1 eq 1A Req 1C > Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Req 1C Req 2 and 3 Compute internal rate of return for this equipment. Present Value Factor Denominator: Numerator: 1 1 Present Value Factor Present Value Factor 0 = Accounts receivable % Annual net cash flow Average total assets Cost of goods sold Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Req 10 Reg 2 and 3 2. If Santana requires investments to have payback periods of four years or less, should she invest in this equipment? 3. If Santana requires investments to have at least an 8% internal rate of return, should she invest in this equipment? 2. If Santana requires investments to have payback periods of four years or less, should she invest in this equipment? 3. If Santana requires investments to have at least an 8% internal rate of return, should she invest in this equipment?