Calculate the discounted payback period

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Reference no: EM132835991

Question - Zoomz Video wants to introduce a new product line but must buy the new machine to produce the product at a cost of $100,000. The machine will be depreciated straight line over its 5 year life to a $0 salvage value. The machine will be sold in year 5 for $500 in scrap metal. The new machine will produce 1,000 units each year over its 5 year life at a sale price of $100.00. Variable Costs are 25% of sales and fixed overhead is $35,000 per year. The company is in the 25% corporate tax bracket and has a discount rate of 10%.If the company were to reinvest cash flows from the project each year, it would invest in an account that invests in Treasuries that yield 4%. Calculate the following and show ALL WORK

1. Payback

2. Discounted Payback Period

3. Net Present Value

4. Profitability Index

5. IRR

6. MIRR

Reference no: EM132835991

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