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Samsung Year 0 1 2 3 4 5 Initial Investment $1,500,000 Depreciation @ 10% $150,000 $150,000 $150,000 $150,000 $150,000 Book Value at Year-End $1,500,000 $1,350,000

Samsung

Year

0

1

2

3

4

5

Initial Investment

$1,500,000






Depreciation @ 10%


$150,000

$150,000

$150,000

$150,000

$150,000

Book Value at Year-End

$1,500,000

$1,350,000

$1,200,000

$1,050,000

$900,000

$750,000

Cash Flows


$200,000

$300,000

$250,000

$200,000

$150,000

Profit


$50,000

$150,000

$100,000

$50,000

$0

ARR (%)


3.33%

10%

6.67%

3.33%

0%

Payback (years)



4.8




NPV @ 10%






$40,000

Requirements:

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

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