Ribu Riban Company is attempting to evaluate the feasibility on investing $95,000 in a pieceof equipment that has a 5-year life. The firm has estimated the cash inflows associated withthe proposal as shown in the following table. The firm has a 12% cost of capital.
a. Calculate the net present value (NPV) for the proposed investment.b. Calculate the internal rate of return (IRR) for the proposed investment.c. Evaluate the acceptability of the proposed investment using NPV and IRR. Whatrecommendation would you make relative to implementation of the project? Why?d. What if NPV and IRR result contradicts one another. Theoretically which result shouldyou choose? How about practically? Is there any difference? Discuss.
Already registered? Login
Not Account? Sign up
Enter your email address to reset your password
Back to Login? Click here