Question: Calculate the payback period, net present value, and internal rate of return for Sunbeam Co. for the following investment in a new line of business

Calculate the payback period, net present value, and internal rate of return for Sunbeam Co. for the following investment in a new line of business (SunBeam SunBlock).

Year Cash Flows

$-2,000,000
$ 150,000
$1,200,000
$ 200,000
$ 250,000
0-
$ 625,000
$ 175,000

Additional information:

SunBeam generally requires a 6-year payback for a project to be undertaken, and SunBeam requires at least a return of 12% for an investment to be undertaken.

Required:

Calculate NPV, IRR and payback period for this new project. Show your answers.
Should SunBeam undertake this project? Why or why not?

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