Rockland Co is considering purchasing gear to increase its business. Given the information below, conduct the required capital budgeting analysis to offer a recommendation. Use five of the following seven methods. Please detail any assumptions made and show your calculations for your recommendation. Finally, calculate DeltaNPV/DeltaPrice.

• Net Present Value
• Internal Rate of Return
• Modified Internal Rate of Return
• Profitability Index
• Payback Period
• Discounted Payback Period
• Average Accounting Return

To purchase the equipment, Rockland Co. incurs the following costs:

Equipment purchase price	$35,700,000
Equipment useful life	5 years, Straight Line Depreciation Rate 20% per year
Equipment Salvage value	$4,670,000
Required R&D	$1,200,000
Marketing study	$450,000

Rockland Co wants to produce a unique widget with the following cost structure:

Unit Price	$525
Unit Variable Cost	$310
Fixed Cost	$6,200,000
Tax Rate	30%
Estimate of the Annual Net Working Capital of Sales	25%
Required Return	15%

The companys projections for sales are shown below:

Year	1	2	3	4	5
Sales (units)	75,000	98,000	115,000	105,000	65,000