Question: The Walker Landscaping Company can purchase equipment on sale for $3,200. The asset has a two-year life, will produce a cash flow of $800 in the first year, and $3,000 in the second year. The interest rate is 15%.
REQUIRED:
1) Assuming end of year cash flows, calculate the project's: a) the project's payback, b) IRR and c) NPV. 2) Should the project be undertaken? Why or why not?