Question
Delta Industries is considering an investment in a new machine. The machine costs GBP 75,000 and is expected to generate the following cash inflows: Year
Delta Industries is considering an investment in a new machine. The machine costs GBP 75,000 and is expected to generate the following cash inflows:
Year | Cash Flows |
Initial Investment | (75,000) |
1 | 20,000 |
2 | 25,000 |
3 | 30,000 |
4 | 35,000 |
Requirements: a. Determine the payback period for the machine investment. b. Calculate the NPV if the discount rate is 9%. c. Should Delta Industries invest in the new machine based on the NPV and payback period analyses?
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
10th edition
978-0077511388, 78034779, 9780077511340, 77511387, 9780078034770, 77511344, 978-0077861759
