### Evaluating a capital expenditure proposal

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##### Reference no: EM131773463

Mouser Company is evaluating a capital expenditure proposal with the following predicted cash flows:

 Initial investment: \$110,000 Operations: Year 1 \$40,000 Year 2 30,000 Year 3 55,000 Salvage value: -0- Discount rate 12%

Required: Determine the following values:

a. Net present value of the investment at a discount rate of 12 percent, using a spreadsheet or financial calculator

b. Payback period

c. Accounting rate of return using average investment

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