Capital Budgeting: Homework 1.Holland Brewery is considering a new high tech bottle labeler called the "Super Labeler that will improve operations and save money. It is quicker, more efficient, and the labeling is of higher quality. It will initially cost $22,430 and has a useful life of five years. It is estimated that it could save Holland Brewery $7,500 per year. The cash flows are as follows: Year Super Labeler 0-$22.430 1 7,500 2 7,500 3 7,500 4 7,500 5 7,500 Assume Holland Brewery's cost of capital (the discount rate) is 14 percent. Calculate the a. Payback period b. Net Present Value (NPV) c. Profitability Index d Internal Rate of Return (IRR) e. Modified Internal Rate of Return (MIRR) Based on your calculations, should the labeler be purchased