Alternate Exercise A Diane ManufacturingCompany is considering investing $500,000 in new equipment with anestimated useful life of 10 years and no salvage value. Theequipment is expected to produce $320,000 in cash inflows and$200,000 in cash outflows annually. The company uses straight-linedepreciation, and has a 30% tax rate.
a. Determine the annual estimated net income and net cashinflow.
b. Calculate the payback period
c. Calculate the accounting rate of return.
