Reyes Consulting is considering an investment in equipment for $175,000. Information related to this purchase is as follows:
Instructions
a. Determine the net present value of the investment.
b. Calculate the simple payback period for the investment.
c. Using Excel, calculate the internal rate of return for the investment.
d. Calculate the profitability index.
e. Should the investment be undertaken?

Question

Reyes Consulting is considering an investment in equipment for $175,000. Information related to this purchase is as follows:
  Instructions
a. Determine the net present value of the investment.
b. Calculate the simple payback period for the investment.
c. Using Excel, calculate the internal rate of return for the investment.
d. Calculate the profitability index.
e. Should the investment be undertaken?

Quizplus · Accepted Answer

The Answer of Reyes Consulting is considering an investment in equipment for $175,000. Information related to this purchase is as follows:
  Instructions
a. Determine the net present value of the investment.
b. Calculate the simple payback period for the investment.
c. Using Excel, calculate the internal rate of return for the investment.
d. Calculate the profitability index.
e. Should the investment be undertaken?

Reyes Consulting Is Considering an Investment in Equipment for $175,000