Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. payback, npv, and irr   rieger i

Payback, NPV, and IRR   Rieger International is evaluating the feasibility of investing ​$86 comma 00086,000 in a piece of...

60.2K

Verified Solution

Question

Finance

Payback, NPV, and IRR   Rieger International is evaluating thefeasibility of investing

​$86 comma 00086,000

in a piece of equipment that has a

55​-year

life. The firm has estimated the cash inflows associated withthe proposal as shown in the following​ table:

LOADING...

.

The firm has a

99​%

cost of capital.

a.  Calculate the payback period for the proposedinvestment.

b.  Calculate the net present value​ (NPV) for the proposedinvestment.

c.  Calculate the internal rate of return

​(IRR)​,

rounded to the nearest whole​ percent, for the proposedinvestment.

d.  Evaluate the acceptability of the proposed investment usingNPV and IRR. What recommendation would you make relative toimplementation of the​ project?

Questions are:

The payback period of the proposed investment is ___ years

The NPV of the proposed investment is

​The IRR of the proposed investment is

Should Rieger International accept or reject the proposed​investment?

Year

​(t​)

Cash inflows​ (CF)

Copy to Clipboard+
Open in Excel+

1

​$20 comma 00020,000

2

​$30 comma 00030,000

3

​$35 comma 00035,000

4

​$20 comma 00020,000

5

​$20 comma 00020,000

Answer & Explanation Solved by verified expert
4.3 Ratings (691 Votes)
aPayback period full years until recovery unrecovered cost at the start of the yearcash flow during the year 3 years 86000 85000 20000 3 years 1000 20000 3 years 005 3005 years bNet present value is calculated using a financial calculator by inputting the below Press the CF button CF0 86000 It is    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

At an output level of 45,000 units, you calculate that the degree of operating leverage is...

Finance
Q

What does Sartre mean by saying that we are “condemned to be free”? What does this...

Psychology
Q

A thin convex lens L refractive index 1 5 is placed on a plane mirror...

Physics
Q

The axis of a long hollow metallic cylinder inner radius 1 0 cm outer radius...

Physics
Q

A line segment has endpoints A(2, -1) andB(3,5).What is the output of the transformationT(AB)((-4,0)?A. a...

Basic Math
Q

If R x 8x 11 find the following Give exact answers Do not round a...

Algebra
Q

Ngu owns equipment that cost $97,100 with accumulated depreciation of $66,400. Ngu asks $35,900 for...

Accounting
Q

IT IS COST ACCUNTING VARIANCE ANALYSIS, FILL IN THE BLANKS. Tytler, Inc., produces chemicals for...

Accounting
Q

Calculate the 2020 taxable income for the following taxpayer (follow the formula on pg. 1-16,...

Accounting
Q

Question 2(20 marks) Gong Corporation issued a $600,000,3-year, non-interest-bearing note payable to Billings...

Accounting
Q

5 points Suppose that there are two independent economic factors, F1 and F2. The risk-free...

Finance
Q

Los datos comparativos de los estados financieros de Carmono Company son los siguientes: ...

Accounting