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Intel Year 0 1 2 3 4 5 Initial Investment $1,800,000 Depreciation @ 12% $216,000 $216,000 $216,000 $216,000 $216,000 Book Value at Year-End $1,800,000 $1,584,000

Intel

Year

0

1

2

3

4

5

Initial Investment

$1,800,000






Depreciation @ 12%


$216,000

$216,000

$216,000

$216,000

$216,000

Book Value at Year-End

$1,800,000

$1,584,000

$1,368,000

$1,152,000

$936,000

$720,000

Cash Flows


$300,000

$350,000

$300,000

$250,000

$200,000

Profit


$84,000

$134,000

$84,000

$34,000

-$16,000

ARR (%)


4.67%

9.78%

6.14%

2.89%

-2.22%

Payback (years)



4.6




NPV @ 10%






$75,000

Requirements:

  1. Calculate the ARR, payback period, and NPV.
  2. Evaluate the investment's financial feasibility.
  3. Provide a recommendation.

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