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Calculate the simple payback period

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Reference no: EM132555235

Ferrari, is considering purchasing a new grinding machine with a useful life of 10 years. The initial outlay for the machine is $370,000. The required rate of return for Ferrari, is 23%. The expected cash flows are as follows:

Year After-tax Expected Cash Flow

-$40,000
-$80,000
-$140,000
-$140,000
-$120,000
-$80,000

-Calculate the simple payback period.

-Calculate the Net Present Value of the investment

-Calculate the Internal Rate of Return for the investment

Reference no: EM132555235

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