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Determine capital budgeting decisions

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Capital Budgeting Decisions

Chee Company has gathered the following data on a proposed investment project:

Investment required in equipment............. $240,000
Annual cash inflows .................................. $50,000
Salvage value ............................................ $0
Life of the investment ............................... 8 years
Required rate of return .............................. 10%
Assets will be depreciated using straight
line depreciation method

Required:

Question 1: Using the net present value and the internal rate of return methods, is this a good investment?

Reference no: EM132497638

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