Spring Company is considering the purchase of some equipment.The initial investment will be $200,000.The estimated useful life of the equipment will be 5 years, at which point it will have a zero terminal salvage value.The annual savings in cash operating costs will equal $68,000, and the company has a minimum desired rate of return of 12%. Use straight-line depreciation and ignore income taxes.

Compute:

a.Net-present value

b.Payback period

c.Accounting rate of return using initial investment

d.Internal rate of return