Average Rate of Return, Cash Payback Period, Net Present Value Method Southwest Transportation Inc. is considering a distribution facility at a cost of $256,000. The facility has an estimated life of 10 years and a no residual value. It is expected to provide yearly net cash flows of $32,000. The company's minimum desired rate of return for net present value analysis is 10%. Click here to access the present value tables (Exhibit 2 and Exhibit 5) to use for this problem. a. Compute average rate of return, giving effect to straight-line depreciation on the investment. Round to one decimal place. % b. Compute the cash payback period. years c. Compute the net present value. If required, use the minus to indicate a negative net present value. Total present value of annual net cash flows Less: amount to be invested Equals: net present value