The management of Niagra National Bank is considering an investment in automatic teller machines. The machines would cost $148,050 and have a useful life of seven years. The banks controller has estimated that the automatic teller machines will save the bank $31,500 after taxes during each year of their life (including the depreciation tax shield). The machines will have no salvage value.

Required:

1.Compute the payback period for the proposed investment. (Round your answer to 1 decimal place.)

2.Compute the net present value of the proposed investment assuming an after-tax hurdle rate of: (a) 10 percent, (b) 12 percent, and (c) 14 percent. (Negative amounts should be indicated by a minus sign.)