a. Find the accounting return on investment for a project that costs $10,000, will have no salvage value, and has expected annual aftertax profi ts each year of $1,000.

b. Determine the payback period for a capital investment that costs $40,000 and has the following after-tax profi ts. (The projected outlay of $40,000 will be depreciated on a straight-line basis over 7 years to a zero salvage value.)

Year After-Tax Profi ts 1 $4,000 2 5,000 3 6,000 4 6,500 5 6,500 6 6,000 7 5,000 LO.1