McCall Manufacturing is evaluating a proposed capital budgeting project that will require an initial investment of $112,000. The project is expected to generate the following net cash flows:

Year Cash flow

1 $36,400

2 $50,300

3 $44,400

4 $40,900

Assume the desired rate of return on a project of this type is 12%.

REQUIRED:

Compute the following for McCalls project:

1. Payback period

2. Discounted payback period

3. Net Present value

4. Internal rate of return

5. Modified internal rate of return

6. Profitability index