Linden Corp. is considering an investment that requires immediate payment of $40,000 and provides expected cash inflows of $16,000 annually for 6 years. Linden Corp. requires a 10% return on its investments.
Requirement 1: Compute the payback period for this investment.
Requirement 2: Compute the net present value of this investment.
Requirement 3: Compute the internal rate of return for this investment.