Net present value method

The following data are accumulated by Waiola Company in evaluating the purchase of $$112,700$ of equipment, having a $4-$year useful life:

Present Value of $$1$ at Compound Interest

Present value of net cash flow

Amount to be invested

Net present value

b$.$ Would management be likely to look with favor on the proposal? Make$-$or$-$buy decision

Differential Analysis

Make $($Alt$.1)$ or Buy $($Alt$.2)$ Carrying Case

May $31$

b$.$ Assuming there were no better alternative uses for the spare capacity, it would

to manufacture the carrying cases. Fixed factory overhead is

to this decision.Average rate of return, cash payback period, net present value method for a service company

Compute the following:

a$.$ The average rate of return, giving effect to straight$-$line depreciation on the investment. If required, round your answer to one decimal place.

$\%$

b$.$ The cash payback period.

$$

Present value of annual net cash flows $s$

Amount to be invested

Net present value