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Uncle Cosmo plans to build a factory. It will cost $ 1 , 0 0 0 , 0 0 0 . He expects the after

Uncle Cosmo plans to build a factory. It will cost $

1, 000, 000 .

He expects the after

-

tax cash inflows to be $

230, 000

annually for

6

years, after which he plans to scrap the equipment and retire to the beaches of Jamaica.

What is the projects payback period?

Assume the required return is

8 % .

What is the projects NPV

?

Assume the required return is

20 % .

What is the projects IRR? Should it be

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