Problem
Castle Ltd is attempting to evaluate the feasibility of investing $250,000 in a new printing machine with a five-year life. The company has estimated the cash inflows associated with the proposal as shown below. The company has 10% cost of capital. Year Cash Inflows 1 $50,000 2 $95,000 3 $83,500 4 $91,500 5 $101,000.
Task: (input the correct answers in the response template provided - workings are not required) Calculate the payback period for the proposed investment. Calculate the NPV for the proposed investment. Calculate the IRR of the project. Would you, as a financial advisor opt for this investment? Why? Why Not?