Q$5$: CPP Company is considering a nev investment proposal with a $15-$year useful life. What is the payback

period if the initial investment is $$443,000$ with expected after$-$tas net cash flow of $$74,000$ and after$-$tan net

income of $$44,000?$ Should this investment be pursued?

a$.$ Calculate the payback period

Payback period $=$

b$.$ Should ve purchase this investment? Why or Why not?

Q$6$: Jolly Holiday Company is considering investing $$41,000$ in a nev machine. The machine is expected to

last $10$ years and to have a salvage value of $$2,000.$ The straight$-$line method of depreciation is used. Annual

after$-$tas net cash flow from the machine is expected to be $$8,000.$ Round depreciation to nearest DOLLAR.

a$.$ Calculate Annual Straight$-$line depreciation

Annual depreciation $=$

b$.$ Calculate After$-$tas net income

After tax net income $=$

c$.$ Calculate the Average Investment

Average Investment $=$

d$.$ Calculate the Accounting $($or Unadjusted$)$ Rate of Return

Accounting Rate of Return $=$