1) Bella Company is considering purchasing new equipment for $403,416. It is expected that the equipment will produce net annual cash flows of $51,720 over its 10-year useful life. Annual depreciation will be $40,342. Compute the cash payback period. (Round answer to 1 decimal place, e.g. 10.5.)
Cash payback period
years
2) Hsung Company accumulates the following data concerning a proposed capital investment: cash cost $216,822, net annual cash flows $42,600, present value factor of cash inflows for 10 years 5.22 (rounded). (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45).)
Determine the net present value, and indicate whether the investment should be made.
| Net present value |
|
$ |
|
The investment shouldshould not be made.