Assume that you have received a capital expenditure request for $52000 for plant equipment and that you are required to do a justification analysis using capital budgeting techniques. The companys cost of capital is 12% and the equipment (investment) is expected to generate net cash inflows of $13000 per year for 8 years and then $9000 for one year.
You are to calculate and explain your quantitative calculations of each of the four capital-budgeting techniques listed then based upon these calculations write a summary that provides a justification to proceed or not proceed with the project.
Calculate the projects net present value (NPV).
Calculate the projects internal rate of return (IRR).
Calculate the projects profitability index.
Calculate the projects discounted payback period.
Recommend whether the project should be accepted or rejected and explain why.
To complete this assignment submit an Excel file with your time value calculations and a two-page paper that explains the calculations and provides your recommended decision and explanation of why that decision is recommended. The paper must be submitted as a Word document and it must follow APA style guidelines.