Isomer Industrial Training Corporation is considering the purchase of new presentation equipment at a cost of $150,000. The equipment has an estimated useful life of 10 years with an expected salvage value of zero. The equipment is expected to generate net cash inflows of $35,000 per year in each of the 10 years. Isomer's discount rate is 16%. Isomer uses the straight-line method of depreciation for its assets.
What is the net present value of the presentation equipment?
Between what two percents does the internal rate of return of the presentation equipment fall?
What is the payback period of the presentation equipment?
What is the simple rate of return of the presentation equipment?