Capital Budgeting

Find the Payback Period, Accounting rate of return, Internal rate of return, Net Present Value and the Profitability Index

investment required=$15,000

Annual Net Cash Flow

YR1 6,000

YR2 6,000

YR3 10,000

YR4 10,000

YR5 4,000

Total Cash Flow for 5yrs $36,000

Useful life in years 5

"Hurdle rate" (cost of capital) 20%

Estimated Salvage Value $12,000

Average Annual Cash Flow $7,200

\begin{tabular}{|r|r|} \hline$ & 15,000 \\ \hline & 6,000 \\ \hline 6,000 \\ \hline 10,000 \\ \hline 10,000 \\ \hline$ & 4,000 \\ \hline & 36,000 \\ \hline 5 & 12,000 \\ \hline & 20.00% \\ $ & 7,200.00 \end{tabular}