Osyka Company is evaluating a capital budgeting proposal that will required an initial investment of $33,000. The

Question:

Osyka Company is evaluating a proposal that will required an initial investment of $33,000. The project will have a 6-year life. The after-tax annual cash inflow expected from this investment is $10,000. The desired rate of return is 15%.
Required:
(1) What is the payback period?
(2) Compute the of the project.
(3) What amount would the company have had to invest 6 years ago, at 15% compounded annually, to have $33,000 now?
Net Present Value
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