The St, Louls to Seattie Ra lroad is considering acquiring equipment at a cost of $3,600,000. The 6quipment has an estimated life of 8 years and no residual value. It is expected to provide yearly aet cast thows of 5750,000 . The company's minimum desired rate of reburn for net present value analytit is 120 . Combute the following: a. The iverage rate of return, giving effect to straight-line depreciation on the investment. Round to one decimal place. xis b. The cash payback period, Round to one decimal place. c. The net present yalue, Use the above table of the present value of an annuity of \$1. Round to the nearest dollar. feritisece 7 Civax My wor a. Divide the cstimated average annual income by the average investment. Net cash fiow less the annual depreciation expense equals average annual income. Investment cost divided by two equals average investment. D. Divide the amount to be invested by the annual net cash inflow. 6. Subtract the cost from the present value of the annual net cach flow. (Use the present value of an annuity factor for 8 periods at 12%, refer Exhibit 5 in the text.)