Problem: Given the following capital project data:
Cost of automation system (invoice): $750,000
Transportation and installation: $150,000
Training: $100,000
Firm's WACC: 10%
Firm's tax rate: 40%
Depreciation 5 years, straight line
Life of project: 3 years
Salvage value: $375,000
Annual cost savings (net): $100,000
Increased annual sales (net): $200,000
Calculate (1) the payback, (2) the discounted payback, (3) the NPV, (4) the IRR, (5) the MIRR, and (6) your recommendation on the project.