Great Plains Transportation Inc. is considering acquiring equipment at a cost of $246,000. The equipment has an estimated life of 10 years and no residual value. It is expected to provide yearly net cash flows of $61,500. The company's minimum desired rate of return for net present value analysis is 10%.

Present Value of an Annuity of $1 at Compound Interest

a. Compute the average rate of return, giving effect to straight-line depreciation on the investment. Do not enter the percent sign.
b. Compute the cash payback period.
c. Compute the net present value. Use the above table of the present value of an annuity of $1.
Round to the nearest dollar.
Present value of annual net cash flows: $
Amount to be invested:
net present value: $

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Year 6% 10% 12% 15% 20% 0.833 0.943 0.909 0.893 0.870 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 3.037 4 3.465 3.170 2.855 2.589 3.791 5 4.212 3.605 3.353 2.991 4.355 4.917 4.111 3.785 3.326 5.582 4.868 4.564 4.160 3.605 6.210 5.335 4.968 4.487 3.837 5.759 6.802 5.328 4.772 4.031 5.650 10 7.360 6.145 5.019 4.192 2.