Assume that Goodrich Corporationis evaluating a capital expenditure proposal that has the following predicted cash flows:
Initial investment $(85,160)
Operation
Year 1 . . . . . . . . . . . . . . . . .36,000
Year 2 . . . . . . . . . . . . . . . . .50,000
Year 3 . . . . . . . . . . . . . .. . . 40,000
Salvage. . . . . . . . . . .. . . . . .0
a.Using a discount rate of 12 percent, determine the net present value of the investment proposal.
b.Determine the proposal”s internal rate of return. (Refer to Appendix 24B if you use the table approach.)