ABC Company is evaluating a capital budgeting project that is expected to generate $10,000 per year for its six-year life. If the required rate of return is 7%, what is the value of the project?

2. Compute the traditional payback period (PB) and the discounted payback period (DPB) for a project that costs $300,000 if it is expected to generate $75,000 for seven years. The firms required return is 7%.

3. What is the internal rate of return (IRR) for a project that costs $6,330 and is expected to generate $1,800 per year for the next five years? If the firms required rate of return is 10%, what is the projects modified internal rate of return (MIRR)? Should the firm purchase the project?