Evaluating a capital expenditure proposal

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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

Reference no: EM131773463

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