You own an ice rink and are considering investing in a new high speed Zamboni (ice resurfacing machine). This would require an investment of $36,000 (the cost!). You are projecting that with the new Zamboni, additional related annual net cash inflows (with more available ice time for hockey leagues, skating parties, etc.) would be $8,000 annually. The Zamboni is expected to have a 6 year useful life with no salvage/residual value. Your desired discount rate to use where applicable (present value of annuity table is further below) is 7%.

(% answers can be rounded to nearest whole %), must show calculations/FORMULA:

A) What is the expected Simple (accounting) Rate of Return?

B) What is the expected Payback period? C) What is the expected Net Present Value at your desired discount rate? D) What is the expected Internal Rate of Return?

Present value interest factor of an (ordinary) annuity of $1 per period at i% for n periods, PVIFA(i,n).

1 Present value interest factor of an ordinary) annuity of $1 per period at i% for n periods, PVIFA(i,n). Period 1% 2% 3% 4% 5% 6% 0.990 0.980 0.971 0.962 0.952 0.943 2 1.970 1.942 1.913 1.886 1.859 1.833 3 2.941 2.884 2.829 2.775 2.723 2.673 4 3.902 3.808 3.717 3.630 3.546 3.465 5 4.853 4.713 4.580 4.452 4.329 4.212 6 5.795 5.601 5.417 5.242 5.076 4.917 6.728 6.472 6.230 6.002 5.582 8 7.652 7.325 7.020 6.733 6.463 6.210 9 8.566 8.162 7.786 7.435 7.108 6.802 10 9.471 8.983 8.530 8.111 7.722 7.360 7% 0.935 1.808 2.624 3.387 4.100 4.767 8% 0.926 1.783 2.577 3.312 3.993 4.623 5.206 5.747 6.247 6.710 9% 0.917 1.759 2.531 3.240 3.890 4.486 5.033 5.535 5.995 6.418 10% 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 11% 0.901 1.713 2.444 3.102 3.696 4.231 4.712 5.146 5.537 5.889 12% 0.893 1.690 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 13% 0.885 1.668 2.361 2.974 3.517 3.998 4.423 4.799 5.132 5.426 14% 0.877 1.647 2.322 2.914 3.433 3.889 4.288 4.639 4.946 5.216 15% 0.870 1.626 2.283 2.855 3.352 3.784 4.160 4.487 4.772 5.019 16% 0.862 1.605 2.246 2.798 3.274 3.685 4.039 4.344 4.607 4.833 17% 0.855 1.585 2.210 2.743 3.199 3.589 3.922 4.207 4.451 4.659 18% 0.847 1.566 2.174 2.690 3.127 3.498 3.812 4.078 4.303 4.494 19% 0.840 1.547 2.140 2.639 3.058 3.410 3.706 3.954 4.163 4.339 20% 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 21 5.786 5.389 5.971 6.515 7.024 11 12 13 14 15 16 17 18 19 20 25 30 35 40 50 10.368 11.255 12.134 13.004 13.865 14.718 15.562 16.398 17.226 18.046 22.023 25.808 29.409 32.835 39.196 9.787 10.575 11.348 12.106 12.849 13.578 14.292 14.992 15.678 16.351 19.523 22.396 24.999 27.355 31.424 9.253 9.954 10.635 11.296 11.938 12.561 13.166 13.754 14.324 14.877 17.413 19.600 21.487 23.115 25.730 8.760 9.385 9.986 10.563 11.118 11.652 12.166 12.659 13.134 13.590 15.622 17.292 18.665 19.793 21.482 8.306 8.863 9.394 9.899 10.380 10.838 11.274 11.690 12.085 12.462 14.094 15.372 16.374 17.159 18.256 7.887 8.384 8.853 9.295 9.712 10.106 10.477 10.828 11.158 11.470 12.783 13.765 14.498 15.046 15.762 7.499 7.943 8.358 8.745 9.108 9.447 9.763 10.059 10.336 10.594 11.654 12.409 12.948 13.332 13.801 7.139 7.536 7.904 8.244 8.559 8.851 9.122 9.372 9.604 9.818 10.675 11.258 11.655 11.925 12.233 6.805 7.161 7.487 7.786 8.061 8.313 8.544 8.756 8.950 9.129 9.823 10.274 10.567 10.757 10.962 6.495 6.814 7.103 7.367 7.606 7.824 8.022 8.201 8.365 8.514 9.077 9.427 9.644 9.779 9.915 6.207 6.492 6.750 6.982 7.191 7.379 7.549 7.702 7.839 7.963 8.422 8.694 8.855 8.951 9.042 5.938 6.194 6.424 6.628 6.811 6.974 7.120 7.250 7.366 7.469 7.843 8.055 8.176 8.244 8.304 5.687 5.918 6.122 6.302 6.462 6.604 6.729 6.840 6.938 7.025 7.330 7.496 7.586 7.634 7.675 5.453 5.660 5.842 6.002 6.142 6.265 6.373 6.467 6.550 6.623 6.873 7.003 7.070 7.105 7.133 5.234 5.421 5.583 5.724 5.847 5.954 6.047 6.128 6.198 6.259 6.464 6.566 6.617 6.642 6.661 5.029 5.197 5.342 5.468 5.575 5.668 5.749 5.818 5.877 5.929 6.097 6.177 6.215 6.233 6.246 4.836 4.988 5.118 5.229 5.324 5.405 5.475 5.534 5.584 5.628 5.766 5.829 5.858 5.871 5.880 4.656 4.793 4.910 5.008 5.092 5.162 5.222 5.273 5.316 5.353 5.467 5.517 5.539 5.548 5.554 4.486 4.611 4.715 4.802 4.876 4.938 4.990 5.033 5.070 5.101 5.195 5.235 5.251 5.258 5.262 4.327 4.439 4.533 4.611 4.675 4.730 4.775 4.812 4.843 4.870 4.948 4.979 4.992 4.997 4.999