Dell Technologies is evaluating a project requiring an initial investment of $900,000 The asset will be depreciated over five years at 20 per year The expected cash flows are Year Inflow ($) Outflow ($) Year 1 250,000 110,000 Year 2 260,000 115,000 Year 3 270,000 120,000 Year 4 280,000 125,000 Year 5 290,000 130,000 a What is the payback period b Calculate the internal rate of return (IRR) c Assuming a cost of capital of 10 , what is the net present value (NPV) of the cash flows d Should Dell Technologies proceed with the project

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Question: Dell Technologies is evaluating a project requiring an initial investment of $900,000. The asset will be depreciated over five years at 20% per year. The

Dell Technologies is evaluating a project requiring an initial investment of $900,000. The asset will be depreciated over five years at 20% per year. The expected cash flows are:

Year	Inflow ($)	Outflow ($)
Year 1	250,000	110,000
Year 2	260,000	115,000
Year 3	270,000	120,000
Year 4	280,000	125,000
Year 5	290,000	130,000

a. What is the payback period?
b. Calculate the internal rate of return (IRR).
c. Assuming a cost of capital of 10%, what is the net present value (NPV) of the cash flows?
d. Should Dell Technologies proceed with the project?

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