two machines, in which machine should it invest? EX 25-14 Average rate of retum, cash payback period, net present value method for a service company Obj. 2,3 VE 4 years Spanish Peaks Railroad Inc. is considering acquiring equipment at a cost of $1,250,000 provide yearly net cash flows of $312,500. The company's minimum desired rate of return for Compute the following: A. The average rate of return, giving effect to straight-line depreciation on the investment. B. The cash payback period. C. The net present value. Use the present value of an annuity of $1 table appearing in this chapter (Exhibit 5)