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Charlie Company is attempting to evaluate the feasibility of investing $95,000 in a piece of equipment that has a 5-year life. The firm has estimated the cash inflows associated with the proposal as shown below. Assume the firm has a 12% cost of capital.

Year Cash inflows

1 $20,000

2 25,000

3 30,000

4 35,000

5 40,000

a. Calculate the payback period for the proposed investment.

b. Calculate the NPV for the proposed investment.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9863614

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