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following data: 27. Your company has a proposed Capital Investment that has 3-year weful life with the Original Cost of Investment: Residual Value: Year one
following data: 27. Your company has a proposed Capital Investment that has 3-year weful life with the Original Cost of Investment: Residual Value: Year one Net Annual Cash Flows Year two Net Annual Cash Flow: 520,000 50 $10,000 512,000 Year three Net Annual Cash Flow: Minimum acceptable Rate of Return: Annual Net Income Use the following Present Value of $1 table for parts a, and b Year (period) 1 2 3 $ 9,000 10% $3,200 per year 6% 10% 0.943 12% 15% 0.909 0.893 0.870 0.890 0.826 0.797 0.756 0.840 0.751 0.712 0.658 a) Calculate the Net Present Value (NPV) of the investment. Please indicate "positive (+), or "negative (-)" with your answer). b) Calculate the Present Value Index of the investment (round to 0.000). c) Calculate the Cash Payback Period of the Investment (round to 0.0 years). If it is greater than 3 years write ">3 years". d) Calculate the investment's Average Rate of Return (round to 00.0%). e) Based on your calculations above, is the investment's Internal Rate of Return (IRR) greater or less than the Minimum acceptable Rate of Return (10%)? Explain why
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