Discounted payback period for your investment

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Reference no: EM131190817

Determine if the following cash flow is or isn't viable. Using IRR and ERR methods.

The MARR is 10 percent. Also determine the Paybacks years.

First Cost 35,000

Annual Expense,$20,000

Annual Income, $ 30,000

Economic Life in Years 5

a. IRR ?

b. ERR?

c. Number of years for Simple Payback

d. Number of years for Discount Payback

2. If you invest $5,123 in a venture, you will receive $1,110 per year for the next 20 years. Assuming 10% interest, What is the discounted payback period for your investment?

3. A new machine was bought for $9,000 with a life of six years and no salvage value. Its operating cost begins in year one in $7,000 and will increase by 5% every year. If the MARR =12% what is the annual equivalent cost of the machine?

Reference no: EM131190817

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