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Capital Budgeting

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The Seattle Corporation has been presented with an investment opportunity which will yield end-of-year cash flows of $30,000 per year in Years 1 through 4, $35,000 per year in Years 5 through 9, and $40,000 in Year 10. This investment will cost the firm $150,000 today, and the firm's cost of capital is 8 percent.

a. What is the Payback Period, Discounted Payback Period, NPV, IRR, and MIRR for this investment?

b. Should the project be accepted or rejected?

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