Problem

Basic Capital-Budgeting Techniques; Uneven Net Cash Inflows; MACRS Use the data in Problem...

Basic Capital-Budgeting Techniques; Uneven Net Cash Inflows; MACRS Use the data in Problem 12-48 for Bob Jensen, Inc., and MACRS. The asset qualifies as a 5-year property.

Required Compute the following for the proposed investment:

1. Its payback period under the assumption that the cash inflows occur evenly throughout the year.


2. Its book rate of return based on: (a) the initial investment, and (b) an average investment (calculated as a simple average of the 10 average annual book values).

3. Its net present value (NPV).


4. Its internal rate of return (IRR).


5. Its modified internal rate of return (MIRR).

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