$$

$6,7$ P$12-3$A$.$ Net Present Value, Cash Payback, and Average Rate of Return Methods Eastern Incorporated is

evaluating a possible $$64,000$ investment in special tools that would increase cash flows from operations

for four years. The tools will have no salvage value. The income tax rate is $40\%.$ Western uses a $12\%$

hurdle rate when using present value analysis. Other information regarding the proposal is as follows:

dge Business Publishers

Required

a$.$ What are the annual net after$-$tax cash inflows from this proposal?

b$.$ Compute the net present value and indicate whether it is positive or negative. $($Round amounts to

nearest dollar.$)$

c$.$ Compute the excess present value index.

d$.$ Compute the cash payback period.

e$.$ Compute the average rate of return.

f$.$ Compute the internal rate of return.