The investment cost of the new gold car, net of the trade-in value of current vehicles, is $1,675,000. The expected useful life of the vehicles is 5 years and the company uses straight-line depreciation. The disposal value of the electric vehicles at the end of the 5 years is expected to be $150,000. The operation of the gold car would result in cash cost savings of $400,000 a year for five years. The company uses a 9% discount rate to evaluate its investments.

Required:

Calculate:

The payback period

The accounting rate of return

The net present value

The internal rate of return