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[15 points] Burton, a manufacturer of snowboards, is considering replacing an existing piece of equipment with a more sophisticated machine. The cash flows for this
[15 points] Burton, a manufacturer of snowboards, is considering replacing an existing piece of equipment with a more sophisticated machine. The cash flows for this capital investment are provided below. Burton uses a WACC of 14%.
Year | 0 | 1 | 2 | 3 |
Cash Flows | -$139,811 | $65,419.50 | -$2,373.50 | $115,738 |
A. Find the Discounted Payback period, NPV, IRR, and MIRR.
B. Should the new machine be purchased? Why or why not?
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