NPV Simes Innovations, Inc., is negotiating to purchase exclusive rights to manufacture and market a solar-powered toy car. The car's inventor has offered Simes the choice of either a one-time payment of $1,400,000 today or a series of 5 year-end payments of $400,000. a. If Simes has a cost of capital of 8%, which form of payment should it choose? b. What yearly payment would make the two offers identical in value at a cost of capital of 8%? c. What would be your answer to part a of this problem if the yearly payments were made at the beginning of each year? d. The after-tax cash inflows associated with this purchase are projected to amount to $260,000 per year for 15 years. Will this factor change the firm's decision about how to fund the initital investment? Payback, NPV, and IRR Rieger International is evaluating the feasibility of investing $99,000 in a piece of equipment that has a 5-year life. The firm has estimated the cash inflows associated with the proposal as shown in the following table: The firm has a 8% cost of capital. a. Calculate the payback period for the proposed investment. b. Calculate the net present value (NPV) for the proposed investment. c. Calculate the internal rate of return (IRR), rounded to the nearest whole percent, for the proposed investment. d. Evaluate the acceptability of the proposed investment using NPV and IRR. What recommendation would you make relative to implementation of the project? Year (t) 1 2 3 Cash inflows (CF) $30,000 $25,000 $20,000 $40,000 $40,000 4 5