A company is considering purchasing equipment costing $$200,000$ to expand their business. The equipment is expected to have a useful life of $5$ years with no disposal value. The company$$s required rate of return is $14\%.$ The estimated savings in cash operating costs are as follows:

Year Amount

$180,000$

$270,000$

$330,000$

$450,000$

$575,000$

Please compute the following using Excel functions, where applicable, and not present value tables:

A$.$ Payback Period

B$.$ Discounted Payback Period

C$.$ Net Present Value

D$.$ Internal Rate of Return

The payback period and discounted payback period should be rounded to $2$ decimal places. Discounted cash flow amounts should be rounded to the nearest dollar. The internal rate of return should be rounded to $2$ decimal places as a percentage.

Explain if the capital budgeting proposal should be accepted or rejected based on your computations.