question a corp is considering modernizing its productionfacility by investing in ne 3734318
Question: A corp is considering modernizing its productionfacility by investing in new equipment and selling the oldequipment. The following information has been collected on thisinvestment. Old Equipment New Equipment Cost $80,800 Cost $38,560Accumulated depreciation $40,400 Estimated useful life 8 yearsRemaining life 8 years Salvage value in 8 years $4,592 Currentsalvage value $10,600 Annual cash operating costs $29,600 Salvagevalue in 8 years $0 Annual cash operating costs $36,000Depreciation is $10,100 per year for the old equipment. Thestraight-line depreciation method would be used for the newequipment over an eight-year period with salvage value $4,592.a)Determine the cash payback period (Ignore income taxes). (cashpayback period in years) (I know i am supposed to divide the costof capital investment by net annual cash flow, but every time i getthe amounts wrong) b)Calculate the anual rate of return c)Calculatethe net present value assuming a 18% rate of return (Ignore incometaxes) On this answer I was unable to calculate the annual cashflows so that i could get to the part where I use the PV tabled)Should the company purchase the new equipment?