Reference no: EM133102963

Question - What are the net cash flows (FEN) for each of the years of the project's life? Includes year 0 of the investment

Acquisition cost: $520,000

Installation cost: $14,000Training expense: $5,000

Net working capital cost: $30,000Shelf life: 6 years

Salvage value: 10,000Depreciation: straight line for the 6 years

Sales: 630,000 (each year increases 8%)

Variable costs correspond to 35% of sales

Fixed costs for each year are $52,200Tax rate is 25%

What is the discounted payback period of the project? If the investment is expected to be recovered within 5 years, is the project accepted under this technique? The minimum profit required is $50,000, is the project accepted under the NPV method with a current MARR of 15%?

What is the IRR of the project? Is it accepted under this criteria? Write a brief report with your results, their respective interpretations and your final conclusion.