Vernon Electronics is considering investing in manufacturing equipment expected to cost $$370,000.$ The equipment has an estimated useful life of four years and a salvage value of $$21,000.$ It is expected to produce incremental cash revenues of $$185,000$ per year. Vernon has an effective income tax rate of $40$ percent and a desired rate of return of $14$ percent. $($PV of $$1$ and PVA of $$1)$

Note: Use appropriate factor$($s$)$ from the tables provided.

Required

Determine the net present value and the present value index of the investment, assuming that Vernon uses straight$-$line depreciation for financial and income tax reporting.

Determine the net present value and the present value index of the investment, assuming that Vernon uses double$-$declining$-$balance depreciation for financial and income tax reporting.

Determine the payback period and unadjusted rate of return $($use average investment$),$ assuming that Vernon uses straight$-$line depreciation.

Determine the payback period and unadjusted rate of return $($use average investment$),$ assuming that Vernon uses double$-$declining$-$balance depreciation. $($Note: Use average annual cash flow when computing the payback period and average annual income when determining the unadjusted rate of return.$)$