new hoist will enable his mechanics to replace five extra mufflers per week. CALI KUU installed. The cost of a muffier is $36, and the labor cost to install a muffler is $16. Instructions a. Compute the cash payback period for the new hoist. b. Compute the annual rate of return for the new hoist. (Round to one decimal.) Home work E12.10 (LO 1, 2, 5), AP Vilas Company is considering a capital investment of $190,000 in additional productive facilities. The new machinery is expected to have a useful life of 5 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $12,000 and $50,000, respectively. Vilas has a 12% cost of capital rate, which is the required rate of return on the investment. Instructions (Round to two decimals.) a. Compute (1) the cash payback period and (2) the annual rate of return on the proposed capital ex- penditure. b. Using the discounted cash flow technique, compute the net present value. E12.11 (LO 1,2,5), AP Drake Corporation is reviewing an investment proposal. The initial cost is $105,000. Estimates of the book value of the investment at the end of each year, the net cash flows for each year