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a) Compute the net present value NPV=$ Enter negative numbers with a minus sign, j.e., 100 not ($100) or (100). Should you invest? Why? YES
a) Compute the net present value NPV=$ Enter negative numbers with a minus sign, j.e., 100 not (\$100) or (100). Should you invest? Why? YES -- the NPV is negative, which indicates that the investment will reduce costs YES - the NPV is positive, which indicates that the investment is profitable NO -. the NPV is negative, which indicates that the investment is unprofitable b) Compute the payback period. payback period = years c) Compute the accounting rate of return (ARR). To compute ARR, first compute: annual depreciation =$ annual income =$ average investment =$ ARR=% If your answer is 10%, enter 10 without the percent sign. d) Which of the three methods in (a)-(c) should you use in real life? NPW only payback method only ARR only always use all three methods to reach the best decision
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