Hampton Company is considering an investment in equipment that is capable of producing electronic parts twice as fast as existing technology. The outlay required is $2,340,000. The equipment is expected to last five years and will have no salvage value. The expected cash flows associated with the project are as follows:

Required:
1. Compute the project's payback period.
2. Compute the project's accounting rate of return on:
a. Initial investment
b. Average investment
3. Compute the project's net present value, assuming a required rate of return of 10 percent.
4. Compute the project's internal rate ofreturn.

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Year Cash Revenues Cash Expenses S3,042,000 3,042,000 3,042,000 3,042,000 3,042,000 $2,340,000 2,340,000 2,340,000 2,340,000 2,340,000 4