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What is the net present value of this investment

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Question - Harry Corp buys equipment for $224,888 that will last for 9 years. The equipment will generate cash flows of $36,000 per year and will have no salvage value at the end of its life. Ignore taxes. Use 10% required rate of return.

(a) What is the Present Value (PV) of this investment (at 10%)?

(b) What is the NET Present Value (NPV) of this investment? If you need 10%, should you buy the equipment?

(c) What is the Internal Rate of Return (IRR) of this investment?

(d) What is the payback period?

Reference no: EM132029830

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