Posted by **dillon** on Friday, September 21, 2012 at 11:43pm.

Salt River Copmany is evaluating a capital expenditure propsal that has the following predicted cash flows:

Intial investment $(43,270)

Operation

Year 1 20,000

Year 2 30,000

Year 3 10,000

Salvage 0

a. Using a discount rate of 14 percent, determine the net present value of the investment proposal. Show work.

b. Determine the proposal's internal rate of return. Show work.