Rieger international is attempting to evaluate the feasibility of investing $95,000 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 12% cost of capital.

Year (t) Cash inflows (CFt)

• $20,000
• $25,000
• $30,000
• $35,000
• $40,000

• Calculate the payback period for the proposed investment.
• Calculate the net present value for the proposed investment
• Calculate the internal rate of return, rounded to the nearest whole percent, for the proposed investment.
• Evaluate the acceptability of the proposed investment using NPV and IRR. What recommendation would you make relative to the implementation of the project? Why?