1. NPV=_______%

2. IRR=______%

3. Payback = _______ years

4. Should Alpha Mega Inc do this project? ___ Yes or No? Why or why not?

Use the following information for the remaining questions: Alpha Mega Inc. is thinking about investing in a new piece of equipment at a total cost of $250,000. The project will last five years at which time the equipment will be worthless. His financial analyst has determined the following positive net income will result from this investment (NOTE: THIS IS NOT CASH!): Year Net Income 1 32,500 2 34,000 3 28,000 4 38,000 5 34,000 Beta uses a WACC of 6.5% to evaluate projects of this nature