Single question.

Calculate the Following for the question: i) NPV of investment i-a) Based on above NPV, is IRR higher or lower than 6% ii) IRR for the investment

iii) Determine simple payback period using iii-a) before-tax cash flows iii-b) After-tax cash flows

iv) Determine discounted payback period using after tax cash flows

v) Find ARR

vi) Calcualte profitability index for the investment

The consulting company Clark Robinson \& Martin (CRM) is in that never-ending budgeting phase of the year. Realizing that they couldn't defer a technology update any longer, the managers plan to replace all of the computers in the office. The old computers will be sold for market value. When the new computers reach the end of their useful lives, they will be sold as well. The cost of the combined new computers and annual software updates should be more than covered by efficiency gains and increased volume of sales -at least that's what the managers are expecting. Information related to this investment is as follows