Harris Corporation Provides the Following Data on a Proposed Capital

question 50

Essay

Harris Corporation provides the following data on a proposed capital project: Harris uses straight-line depreciation method with no salvage value.
Required: Compute for this investment project:
1. NPV (the PV annuity factor for 12%, 4 years is 3.037)
2. IRR (to the nearest tenth of a percent). Note: PV annuity factors for 4 years: @ 8% = 3.312; @ 9% = 3.240; @ 10% = 3.170; @ 11% = 3.102; @ 12% = 3.037; and, @ 13% = 2.974)
3. Payback period (assume that cash inflows occur evenly throughout the year).
4. Accounting rate of return (ARR) on the net initial investment.
5. Discounted payback period (assume that the cash inflows occur evenly throughout the year; round your answer to 2 decimal places). The appropriate PV factors for 12% are as follows: year 1 = 0.893; year 2 = 0.797; year 3 = 0.712; year 4 = 0.636.

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