# Great Plains Transportation Inc. is considering acquiring equipment at a cost of $246,000. The equipment has an

## Question:

Compute the following:

(a) The average rate of return, giving effect to straight-line depreciation on the investment.

(b) The cash payback period.

(c) The net present value. Use the table of the present value of an annuity of $1 appearing in this chapter. Round to the nearest dollar.

Net Present Value

What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at... Annuity

An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...

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