US Cola is considering the purchase of a special-purpose bottling machine for $65,000.

It is expected to have a useful life of 4 years with no terminal disposal value. The plant manager estimates the following savings in cash operating costs:

Year/Amount

1.)$25,000

2.)22,000

3.)21,000

4.)20,000

Total $88,000

1. Net present value?

2. Payback period?

3. Discounted payback period.

A. 3.863.86

B.Amount can not be determined

C. 3.643.64

D. 3.713.71

4. Internal rate of return (using the interpolation method). (Use a trial-and-error approach andstraight-line interpolation as necessary. Round your answer to the nearest hundredth of apercent, X.XX%.)

The internal rate of return (IRR) is

%.

5.) Accrual accounting rate of return based on net initial investment( assume straightline depreciation) Use the average annual savings in cash operating costs when computing the numerator.