Weston Company is considering a capital investment of $145,000 in new equipment. The

equipment is expected to have a useful life of 10 years with no salvage value. Depreciation

is computed by the straight

-line method. During the life of the investment, annual net income

and cash inflows are expected to be $11,000 and $25,500, respectively. Easton requires

either a 10% cost of capital "hurdle" rate, or a payback period of 7 years.

Compute the

following:

(a) cash payback period

(b) net present value

(c) internal rate of retur

n (to the

nearest percent)

(d) annual rate of return

Show all computations. State whether the project should be accepted or rejected for each of

the four capital budgeting techniques.