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Required information [The following information applies to the questions displayed below.) Peng Company is considering an investment expected to generate an average net income after taxes of $2,700 for three years. The investment costs $50,400 and has an estimated $7,800 salvage value. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. Accounting Rate of Return Choose Numerator: Choose Denominator: = Accounting Rate of Return Annual after-tax net income I Annual average investment 29,100= %3D Accounting rate of return 2,700/S 9.28 % Required information (The following information applies to the questions displayed below.) Peng Company is considering an investment expected to generate an average net income after taxes of $2,700 for three years. The investment costs $50,400 and has an estimated $7,800 salvage value. Assume Peng requires a 10% return on its investments. Compute the net present value of this investment. Assume the company uses straight-line depreciation. (PV of $1. EV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign.) Cash Flow Select Chart Amount x PV Factor = Present Value Annual cash flow %3D Residual value Net present value

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