1. Park Co. is considering an investment that requires immediate payment of $31,500 and provides expected cash inflows of $12,000 annually for four years. What is the investment's payback period?
2. Park Co. is considering an investment that requires immediate payment of $21,530 and provides expected cash inflows of $6,500 annually for four years. If Park Co. requires a 7% return on its investments. What is the internal rate of return?
3. Peng Company is considering an investment expected to generate an average net income after taxes of $3,400 for three years. The investment costs $50,400 and has an estimated $10,200 salvage value. Assume Peng requires a 10% return on its investments. Compute the net present value of this investment. Assume the company uses straight-line depreciation.
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