am. 306 NPV and IRR: Unequal Annual Net Cash InflowsRocky Road Company is evaluating a capital expenditure proposal that has the following predicted cash flows.Initial investment $(255,000)OperationYear 1Year 2Year 3SalvageREQUIRED$91,500$180,000$93,000$0a. Determine the payback period.Note: Round your answer to two decimal places. Enter 1.251 as 1.25; enter 1.255 as 1.26.2.75x yearsb. Using a discount rate of 12%, determine the net present value of the investment proposal.Note: Round your answer to the nearest dollar.$ 38,112 *c. Determine the proposal's internal rate of return.Note: Round your answer to two decimal places. Enter 10.251% as 10.25%; enter 10.255 % as 10.26%.17* %

The payback period of the project shows how long it will take to recover its costs. By examining the…

Answered: NPV and IRR: Unequal Annual Net Cash…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 4PB

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NPV and IRR: Unequal Annual Net Cash Inflows Rocky Road Company is evaluating a capital expenditure proposal that has the following predicted cash flows. Initial investment $(255,000) Operation Year 1 Year 2 Year 3 Salvage $91,500 $180,000 $93,000 $0