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All techniques Rieger International is evaluating the feasibility of investing $102,000 in a piece of equipment that has a 5-year life. The firm has estimated
All techniques Rieger International is evaluating the feasibility of investing $102,000 in a piece
of equipment that has a 5-year life. The firm has estimated the cash inflows associated with the
proposal as shown in the following table: E:
The firm has a cost of capital of 12%.
a.
Calculate the payback period for the proposed investment.
b. Calculate the discounted payback period for the proposed investment.
c. Calculate the net present value (NPV) for the proposed investment.
d. Calculate the probability index for the proposed investment.
e. Calculate the internal rate of return (IRR) for the proposed investment.
f. Calculate the modified internal rate of return (MIRR) for the proposed investment.
g. Evaluate the acceptability of the proposed investment using NPV, IRR, and MIRR.
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