Compute payback period and net present value

Reference no: EM13901197

The following data are given for Alright Aluminum Company:

Initial cost of proposed equipment Estimated useful life
Estimated annual savings in cash operating expenses
Predicted residual value at the end of the useful life Cost of capital

$75,000
7 years
$18,000
$ 3,000
12%

Compute the following:

(a) Payback period

(b) Present value of estimated annual savings

(d ) Total present value of estimated cash inflows

(e) Net present value (NPV)

(f) Internal rate of return (IRR)

Reference no: EM13901197

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