Mall-asia company is considering buying a new machine, requiring an immediate $400 000 cash outlay. The new machine is expected to increase annual net after-tax receipts by $160 000 in each of the next five years of its economic life. No salvage value is expected at the end of 5 years. The company desires a minimum return of 14% on invested capital.
required:
a. payback period
b. ARR (based on original investment)
c. Internal rate of return
d. net present value
e. profitability index