Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Creighton, Inc. has invested $2,165,800 on equipment. The company anticipates cash flows of $424,386, $512,178, $561,755, $764,997, $816,500, and $825,375 over the next six years.
Creighton, Inc. has invested $2,165,800 on equipment. The company anticipates cash flows of $424,386, $512,178, $561,755, $764,997, $816,500, and $825,375 over the next six years. The cost of capital is 7 percent. What is the NPV, payback period, and discounted payback period and should the firm accept this project based on discounted payback period if the benchmark is 4.5 years? (Round your answer to two decimal places.) Decision making Yes NPV 852,485.92 732,458.12 852,485.92 732,458.12 A) B) C) D) Payback period 3.87 3.97 3.87 3.97 Discounted payback period 4.48 4.48 4.68 4.68 Yes No
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started