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Multiple analysis tools for same LT investment The Company is considering purchasing equipment with a cost of $10,000, a salvage value of $1,000 and a useful life of 5 years. Below are the expected amounts related to the new equipment You will need to solve for the ? and assume a 30% income tax rate. $7.000 2.000 ??? 1.200 SALES COSTS Materials, Labor & Overhead Depreciation on New Equipment Selling & Administrative Expenses Total Costs Pretax income Income tax Net income 2?? 22? 222 ??? ***REQUIRED 1) Calculate the Payback Period in years 2) Accounting Rate of Return 3) NPV (assume 10% hurdle rate) 4) Would you recommend the purchase of the equipment? WHY or WHY NOT? ASSUMPTIONS: Besides Depreciation the sales and cost numbers provided are cash (and accrual) based amounts and will remain constant during the life or use of the asset. I will be grading your PDF for #1-4. if you'd like a preliminary Canvas Score enter the NPV of the asset (round to whole dollar)