Business, 09.05.2020 18:57 josecano2

Vilas Company is considering a capital investment of $183,600 in additional productive facilities. The new machinery is expected to have a useful life of 5 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $10,557 and $51,000, respectively. Vilas has a 12% cost of capital rate, which is the required rate of return on the investment.

Required:
a. Compute the cash payback period. (Round answer to 1 decimal place, e. g. 10.5.)
b. Compute the annual rate of return on the proposed capital expenditure. (Round answer to 2 decimal places, e. g. 10.52%)
c. Using the discounted cash flow technique, compute the net present value.

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Vilas Company is considering a capital investment of $183,600 in additional productive facilities. T...