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Capital Budgeting

Can someone help with the following question?

The following is stream of expect cash flows from a project to replace an old sail boat with a new one. The new boat will cost $15,000 and will be good for 5 years. It will be traded-in for another boat at the end of its useful life. The following cash flows are expected:

Year 1 $5000
Year 2 $5000
Year 3 $4000
Year 4 $3000
Year 5 $8000

The RADR for this boat is $12%. Calculate the NPV, IRR (Using excel), payback period, discounted payback, PI and MIRR using the 12% at the reinvestment. The target payback is 5 years.

Solution Summary

Excel file shows calculations of NPV, IRR (Using excel), payback period, discounted payback, PI and MIRR .

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