•DEF Inc. is planning to invest in a new machine that costs $400,000. The machine is expected to bring in $80,000 annually for the next six years. Calculate the accounting rate of return, payback period, net present value (NPV) at a 15% discount rate, and the internal rate of return (IRR).
•  Detailed Requirement Analysis
•An investment project requires an initial outlay of $250,000 and is expected to generate the following cash inflows:
oYear 1: $60,000
oYear 2: $75,000
oYear 3: $85,000
oYear 4: $90,000
oYear 5: $100,000
•Requirements:
oCalculate the payback period.
oDetermine the net present value (NPV) at a discount rate of 8%.
oFind the internal rate of return (IRR).
oCompute the accounting rate of return (ARR).
oAssess the profitability index (PI).