• Nnovantec Inc. is a B2C payment services company that is seeking to acquire biometric security device manufacturing equipment and wishes to conduct a capital budgeting analysis. The equipment costs $245,000 and will last five (5) years before it must be replaced. The 5-year project is expected to produce after-tax cash flows of $70,000 in the first year, and increase by $10,000 annually; the after-tax cash flow in year 5 will reach $110,000. In addition, the salvage value of the equipment will net the firm $15,000 in additional cash at the end of five years, making the total cash flow in year 5 $125,000. Projects must pay back within 4 years.
•  Required: Answer the following, including variables and calculations to show your work.
•  (a) Does the payback period for the proposed investment support acceptance? 
• (b) If the required return is 15%, is the project's discounted payback period favorable? 
• (c) Assuming the required return is 15%, is the project's net present value favorable? 
• (d) If the required rate of return is 25% does the IRR support acceptance of the investment? 
• (e) Does the project's profitability index support proceeding if the required return is 15%? This question must be completed in excel format in 1 hour. Please let me know if someone can complete this

Answer rating: 100% (QA)

Computation Griven Recquired Return 151 a Initial Investment Cast 245000 Year ... View the full answer