Finance.com has an opportunity to invest in a new high-speed computer for $50,000. The computer will generate a cash flow (from cost savings) of $25,000 a year from now, $20,000 two years from now, and $15,000 three years from now. The computer will be worthless after three years and there will be no more cash flow. Finance.com has determined that an appropriate discount rate is 7 percent for this investment. Should Finance.com Invest in a New High Speed Computer?

 What is the NPV, discounted payback period, Pl and IRR of the investment? If required period is 1.5 years, is project accepted based on PI, NPV, IRR, discounted payback period

Answer rating: 100% (QA)

To determine whether Financecom should invest in the new highspeed computer we need to calculate the ... View the full answer