(Answered) Company x is evaluating a capital expenditure proposal with

Accounting

Company X is evaluating a capital expenditure proposal with the following predicted cash flows:
Initial investment: $110,000

Operations:

Year 1 $40,000
Year 2 30,000
Year 3 55,000
Salvage value: -0-

Additional information for interest rate of 12 percent:

Present value of $1 - year 1 0.893
Present value of $1 - year 2 0.797
Present value of $1 - year 3 0.712
Present value of an annuity of $1 (3 periods) 2.402

Required: Determine the following values:

a. Net present value of the investment at a discount rate of 12 percent
b. Payback period
c. Accounting rate of return using average investment

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