Use the following information for the Quick Study below.

[The following information applies to the questions displayed below.] Peng Company is considering an investment expected to generate an average net income after taxes of $2,700 for three years. The investment costs $51,000 and has an estimated $6,600 salvage value.

Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation.

Accounting Rate of Return
Choose Numerator:	/	Choose Denominator:	=	Accounting Rate of Return
	/		=	Accounting rate of return

Assume Peng requires a 10% return on its investments. Compute the net present value of this investment. Assume the company uses straight-line depreciation. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign.)

Cash Flow	Select Chart	Amount	x	PV Factor	=	Present Value
Annual cash flow					=	$0
Residual value					=	0
	Net present value