• Prepare a spreadsheet using Excel or a similar program in which you compute the following for each proposed location.
  • Accounting rate of return on investment
  • Payback
  • Net present value
  • Internal rate of return

Home Appliances, Inc.

Home Appliances, Inc. is considering expanding its international presence. It sells 25% of all the toaster ovens sold in the United States but only 3% of the toaster ovens sold outside of the United States. The organization believes that it can sell more of its product if it has a production facility located overseas. Estimates concerning two possible locations, Delhi, India and Karachi, Pakistan follow:

Possible Location	Delhi, India	Karachi, Pakistan
Initial cash outlay	$7,000,000	$4,900,000
Useful life	20 years	20 years
Net cash inflows excluding depreciation	$1,550,000	$1,500,000
The cost of capital	9%	9%
Tax rate	40%	40%