You are a city Planner who is considering buying an automated trash truck with a robotic arm to pick up the cans. The initial investment will be $4,500,000 immediately. The checks will allow you to immediately released 30 workers that would've been paid $900,000 at the end of this year and every year after that for the eight years you will have the truck. The cities discount rate is 7%. Ignore all the taxes and working capital.
A) using the NPV decision rule, calculate NPV and state whether u accept or reject.
B) using payback rule. Do u accept or reject if u require full payback by end of year 3?
C) what is the irr? Set up the basic equation