A capital investment project requires an investment of $450,000. It has an expected life of six years with an annual cash flow of $90,000 received at the end of each year. The company uses the straight-line method of depreciation with no mid-year convention. Ignore income taxes.
Required:
a. Compute payback for the project.
b. Compute the net present value of the project using a 12 percent discount rate.
c. Would you recommend this project be accepted? Why or why not?

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The Answer of A capital investment project requires an investment of $450,000. It has an expected life of six years with an annual cash flow of $90,000 received at the end of each year. The company uses the straight-line method of depreciation with no mid-year convention. Ignore income taxes.
Required:
a. Compute payback for the project.
b. Compute the net present value of the project using a 12 percent discount rate.
c. Would you recommend this project be accepted? Why or why not?

A Capital Investment Project Requires an Investment of $450,000