Rieger International is evaluating the feasibility of investing
in a piece of equipment that has a 5-year. The firm has estimated
the cash inflows associated with the proposal as shown in the
following table: The firm has a cost of capital of 12%.
Year Cash inflows
1. 30,000
2. 20,000
3. 35,000
4. 20,000
5. 40,000
A. Calculate the payback period for the proposed investment.
B. Calculate the discounted payback period for the proposed
investment.
C. Calculate the net present value (NPV) for the proposed
investment.
D. Calculate the probability index for the proposed
investment.
E. Calculate the internal rate of return (IRR) for the proposed
investment.
F. Calculate the modified internal rate of return (MIRR) for
the proposed investment.
G. Evaluate the acceptability of the proposed investment using
NPV, IRR, and MIRR.
Rieger International is evaluating the feasibility of investing in a piece of equipment that has a 5-year. The firm has
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