Harris Corporation provides the following data on a proposed capital project:Harris uses straight-line depreciation method with no salvage value.
Required:
Compute for the proposed investment project:
1. The project's estimated NPV (the PV annuity factor for 12%, 4 years is 3.037). Round your answer to nearest whole number (dollar).
2. The project's IRR (to the nearest tenth of a percent). Note: PV annuity factors for 4 years: @ 8% = 3.312; @ 9% = 3.240; @ 10% = 3.170; @ 11% = 3.102; @ 12% = 3.037; and, @ 13% = 2.974).
3. Payback period (assume that cash inflows occur evenly throughout the year); round answer to two decimal places (e.g., 4.459 years = 4.46 years, rounded).
4. Accounting rate of return (ARR) on the net initial investment, rounded to two decimal places (e.g., 10.4233% = 10.42%).
5. Discounted payback period (assume that the cash inflows occur evenly throughout the year; round your answer to 2 decimal places). The appropriate PV factors for 12% are as follows: year 1 = 0.893; year 2 = 0.797; year 3 = 0.712; year 4 = 0.636.
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