Recommendation on the project

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Reference no: EM132147193

1. Given the following capital project data

  • Cost of automation system (invoice):$730,000
  • Transportation and installation:$140,000
  • Training:$100,000
  • Firm's WACC:9%
  • Firm's tax rate:35%
  • Depreciation 5 years, straight line
  • Life of project:3 years
  • Salvage value:$385,000
  • Annual cost savings (net):$105,000
  • Increased annual sales (net):$200,000

Calculate (1) the payback, (2) the discounted payback, (3) the NPV, (4) the IRR, (5) the MIRR, and (6) your recommendation on the project.

Reference no: EM132147193

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