Alternative Project Evaluation Measures: Yogurt and You Company is considering whether to invest in a yogurt machine that costs $350,000 and will return $90.000 after tax for each of the next seven years. After that the asset will have no value.

Required: Compute the following items for this project:

a. Payback.

b. Internal rate of return (using a calculator, computer, or trial and error and interpolation).

c. Internal rate of return if the life is 1 2 years rather than 7.