**Basic Capital Budgeting Techniques; No Taxes, Uniform Net Cash Inflows; Spreadsheets**Bob Jensen Inc. purchased a $650,000 machine to manufacture specialty taps for electrical equipment. Jensen expects to sell all it can manufacture in the next 10 years. To encourage capital investments, the government has exempted taxes on profits from new investments. This legislation is to be in effect for the foreseeable future. The machine is expected to have a 10-year useful life with no salvage value. Jensen uses straight-line depreciation. The net cash inflow is expected to be $150,000 each year for 10 years. Jensen uses a 12% discount rate in evaluating capital investments. Assume, for simplicity, that MACRS depreciation rules do not apply.**Required**Using Excel (including built-in functions for NPV, IRR, and MIRR), compute the following for the above-referenced investment:1. **The payback period**, under the assumption that cash inflows occur evenly throughout the year. Round your answer to 1 decimal place (e.g., 4.581 years = 4.6 years).2. **The accounting (book) rate of return** based on (a) initial investment and (b) average investment. Round both answers to 1 decimal place (e.g., 23.418% = 23.4%).3. **The net present value (NPV)** of the proposed investment under the assumption that cash inflows occur at year-end. Round your answer to the nearest whole dollar. **Transcription for Educational Website**---### Present Value and Rates of Return Analysis4. **Present Value Payback Period** - This is measured in years for the proposed investment, assuming that cash inflows are evenly distributed throughout the year. - **Note:** Due to this assumption, the present value calculations will be approximate, not exact. - For calculating present value amounts, use the appropriate factors from [Appendix C, Table 1](#). - Round your answer to one decimal place. For example, 3.481 years should be rounded to 3.5 years.5. **Internal Rate of Return (IRR)** - This rate should be rounded to one decimal place. - For instance, an IRR of 13.612% should be presented as 13.6%.6. **Modified Internal Rate of Return (MIRR)** - Like IRR, this should also be rounded to one decimal place. - For assistance with this calculation, consider consulting the following resources: - Microsoft Support for MIRR: [MIRR in Excel](https://support.office.com/en-us/Search/results?query=mirr+function&src=as) - Journal of Accountancy: [Calculate Internal Rate of Return in Excel](http://www.journalofaccountancy.com/issues/2017/feb/calculate-internal-rate-of-return-in-excel.html)---**Page 0527**

Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

ensen uses straight-line depreciation. The net cash inflow is expected to be $150,000 each year for discount rate in evaluating capital investments. Assume, for simplicity, that MACRS depreciation r cluding built-in functions for NPV, IRR, and MIRR), compute the following for the above-reference ler the assumption that cash inflows occur evenly throughout the year. Round your answer to 1 deci ears). ate of return based on (a) initial investment and (b) average investment. Round both answers to 1 o 4%)

ensen uses straight-line depreciation. The net cash inflow is expected to be $150,000 each year for discount rate in evaluating capital investments. Assume, for simplicity, that MACRS depreciation r cluding built-in functions for NPV, IRR, and MIRR), compute the following for the above-reference ler the assumption that cash inflows occur evenly throughout the year. Round your answer to 1 deci ears). ate of return based on (a) initial investment and (b) average investment. Round both answers to 1 o 4%)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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