Bob's company is considering some new equipment for its bookstores. The project details are as follows:

• The upfront cost of $400,000 will last for 3 years.
• At the end of 3 years, Humber can sell the equipment for $200,000.
• The equipment will generate an extra $40,000 in revenue in the first year, $800,000 for year 2, and then increase by $15,000 for the next three years.
• Humber can borrow at 5%.

Based on the above calculate the project’s

1. NPV
2. IRR
3. Profitability Index
4. Payback
5. Discounted Payback

Answer rating: 100% (QA)

Bobs company Answer a Y 0 Y 1 Y 2 Y 3 Y 4 Y 5 Note Initial investment 40000000 Disposal value 200000... View the full answer