1. Delta Manufacturing

Scenario: Capital Budgeting Decision

Data: Delta Manufacturing is evaluating a capital investment project with the following cash flows:

• Initial Investment: $500,000
• Year 1 Cash Flow: $150,000
• Year 2 Cash Flow: $200,000
• Year 3 Cash Flow: $250,000
• Discount Rate: 10%

Requirements:

1. Calculate the Net Present Value (NPV) of the investment project.
2. Determine the Internal Rate of Return (IRR) for the project.
3. Calculate the Payback Period for the investment.
4. Evaluate the financial feasibility of the project based on NPV, IRR, and Payback Period.
5. Discuss the factors influencing Delta Manufacturing's investment decision.
6. Recommend whether Delta Manufacturing should accept or reject the project based on capital budgeting techniques.