Problem:
Piping Hot Food Services (PHFS) is evaluating a capital budgeting project that costs $75,000. The project is expected to generate after-tax cash flows equal to $26,000 per year for four years. PHFS's required rate return is 14 percent.
Find out:
Question 1: Compute the project's (a) net present value (NPV) and (b) internal rate of return (IRR). (c) Should the project be purchased? Please show your all work and provide all formulas which are used in this problem.