Question: Citrus Company is considering a project that has estimated annual net cash flows of $35,145 for eight years and is estimated to cost $165,000. Citrus's cost of capital is 6 percent.

Determine the net present value of the project. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign. Round your final answer to 2 decimal places.)

Net Present Value

Based on NPV, determine whether project is acceptable to Citrus.

Acceptable

Unacceptable

Blue Marlin Company is considering the purchase of new equipment for its factory. It will cost $259,000 and have a $51,800 salvage value in five years. The annual net income from the equipment is expected to be $31,080, and depreciation is $41,440 per year.

Calculate Blue Marlin's annual rate of return and payback period for the equipment. (Do not round intermediate calculations. Round your Payback Period to 2 decimal places.)

Annual Rate of Return %

Payback Period Years

A project has estimated annual net cash flows of $62,000 and is estimated to cost $390,600. What is the payback period? (Round your answer to 2 decimal places.)

Payback Period

Years

What is the accounting rate of return for a project that is estimated to yield total income of $369,000 over three years and costs $852,000? (Round your answer to 2 decimal places. (i.e. .1234 should be entered as 12.34%.))

Accounting Rate of Return %