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I need the solution of them please
Consider the cash flow data below for ABC Inc. Assuming the firm’s MARR to be 15%, compute the discounted-payback period. Consider the Multi-Tasking machine center investment project with cash flow below. If the project life is seven years and the firm’s MARR is 15% compute the Net present worth of this investment. Is it an acceptable project?
Expert Answer
1.
calculations: Discounted cashflow for 1st year = (Cash flow in the first year which is 454000) / (1.15 ^ Period which is 1 )
Similarly Discounted cashflow for 2nd year = (Cash flow in the second year which is 681000) / (1.15 ^ Period which is 2 )
Payback period= Year before full recovery + (unrecovered amount at the start of period / Cash flow during the period)
Payback period = 2 + (293258.81 / 519151.947)
Payback period = 2.565
2.
Here it can be seen that Net present Value of the project is = 1546571.232
Which proves that it is an acceptable project
