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Business, 20.12.2019 20:31 devin3634

Vilas company is considering a capital investment of $190,900 in additional production 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 $11,600 and $49,900, respectively. vilas has a 12% cost of capital rate, which is the required rate of return on the investment.

required:

1. compute the cash payback period.

2. compute the annual rate of return on the proposed capital expenditure.

3. using the discounted cash flow technique, compute the net present value.

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Answers: 1

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