Another firm is evaluating investment in specialized equipment that cost $40 million and is projected to generate after-tax and pre-leverage cash flow of $8 million per year for eight years. The firms cost of capital is approximately 5.00% and cost of equity is about 8.00%. Determine each of the following capital budgeting metrics and indicate whether and why the equipment should be purchased (or not) by each metric. Reinvest cash flow for the MIRR model at the cost of relevant rate given the cash flow specified.

• Payback

• NPV

• IRR

• MIRR