Anderson Taylor Consulting plans to replace all their computers in the office, the old computers will be sold for market value. The cost of the combined new computers and annual software updates are expected to provide efficiency gains and increased volume of sales. Information related to this investment is as follows:

Cost new computers $

Salvage value of new computers at end of useful life

Life of new computers years

Market value of old computers Today book value

Annual software update cost all computers new and old

Annual operating cash inflow efficiency & increased sales from new computers

Minimum required rate of return

Applicable Tax rate

a calculate the NPV of the investment

b calculate the IRR for this investment

c determine simple payback period using before tax cash flow, after tax cash flow

d determine the discounted payback period suing after tax cash flow

e find the ARR

f calculate the profitability index for this investment