Question
Instructions: Please answer questions A-D below. I can't award credit if A-D isn't answered completely. Primus Corp. is planning to convert an existing warehouse into
Instructions: Please answer questions A-D below. I can't award credit if A-D isn't answered completely.
Primus Corp. is planning to convert an existing warehouse into a new plant that will increase its production capacity by 45 percent. The cost of this project will be $7,125,000. It will result in additional cash flows of $1,875,000 for the next eight years. The company uses a discount rate of 12 percent.
A. What is the payback period?
B. What is the NPV for this project ?
C. What is the IRR?
D. Based on the results give a suggestion to Primas Corp?
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Intermediate Accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
6th edition
978-0077400163
