Question
A company is looking to invest in a new warehouse distribution center and needs you to determine if they should invest in the new facility
A company is looking to invest in a new warehouse distribution center and needs you to determine if they should invest in the new facility using capital budgeting techniques. The initial cost of the investment is $15,000,000. The anticipated cash flows from the investment is estimated to be $3,500,000 for years 1-3, $2,300,500 for years 4-7, and $4,100,800 for years 8-10 with the expectation that the initial cost of the investment should be recovered in 5 years. The cost of capital has been determined to be 12 percent. Calculate the Payback, NPV, IRR and PI.
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