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Swifty Company is considering a capital investment of $520,010 in additional productive facilities. The new machinery is expected to have a useful life of 5
Swifty Company is considering a capital investment of $520,010 in additional productive facilities. The new machinery is expected to have a useful life of 5 years with no salvage value. Depreciation is computed by the straight-line method. During the life of the investment, annual net income and cash flows are expected to be $49,000 and $149,000, respectively. Swifty has a 12% cost of capital rate, which is the minimum acceptable rate of return on the investment. (a) Your answer has been saved. See score details after the due date. Compute the annual rate of return. (Round answer to 1 decimal place, e.g. 15.5.) Annual rate of return % Compute the cash payback period on the proposed capital expenditure. (Round answer to 2 decimal places, e.g. 15.25.) Cash payback period years (b) Attempts: 1 of 1 used Using the discounted cash flow technique, compute the net present value. (Use the above table.) (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5,275.)
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