Calculate net present value index and payback period


A machine has a first cost of $100,000 (in today's dollars) and a salvage value of $40000 (in current dollars) at the end of a five-year life. The machine will provide after tax cash flow of $30,000 (in current dollars) per year over its life of five years.

1. Calculate the following: Payback Period

2. Calculate the following: Project Net Present Worth @15%

3. Calculate the following: Rate of Return

4. Calculate the following: Net Present Value Index (@15%)

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Microeconomics: Calculate net present value index and payback period
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