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# Vilas Company is considering a capital investment of $190,300 in additional productive facilities. The new machinery is expected to have a useful...

Vilas Company is considering a capital investment of $190,300 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 $14,800 and $49,900, respectively. Vilas has a 12% cost of capital rate, which is the required rate of return on the investment.

**(a)**

Compute the cash payback period. **(Round answer to 2 decimal places, e.g. 10.50.)**

Cash payback period

years

Compute the annual rate of return on the proposed capital expenditure. **(Round answer to 2 decimal places, e.g. 10.50.)**

Annual rate of return

%?

**(b)**

Using the discounted cash flow technique, compute the net present value. **(If the net present value is negative, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round answer for present value to 0 decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)**

Net present value?