Question
Use the for the following information for next 3 questions: Beta Corporation is thinking about investing in a new piece of equipment at a total
Use the for the following information for next 3 questions:
Beta Corporation is thinking about investing in a new piece of equipment at a total cost of $300,000. The project will last five years at which time the equipment will be worthless. His financial analyst has determined the following positive net income will result from this investment (NOTE: THIS IS NOT CASH!):
Year | Net Income |
1 | 32,500 |
2 | 45,000 |
3 | 28,000 |
4 | 38,000 |
5 | 34,000 |
Beta uses a WACC of 6.5% to evaluate projects of this nature.
1.Find the following (show your work):
NPV = ___________ % (round to x.xx)
2.IRR = __________ % (round to x.xx)
(show your work)
3.Payback = ___________ years (round to 4 x.xxxx)
(show your work)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started