3235
Based on the information provided in the proformastatement attached below, compute the Net Present Value, theInternal Rate of Return, the Cash Payback and the Accounting Rateof Return
Acme International
Proforma IncomeStatements
Year 1 Year2 Year 3 Year 4 Year5 Year 6
Sales revenue $580,000.00 $609,000.00 $639,400.00 $671,000.00 $745,500.00 $782,000.00
Less: Operating expenses $320,000.00 $336,000.00 $352,800.00 $370,400.00 $389,000.00 $408,500.00
Less: Depreciation expense $60,000.00 $60,000.00 $60,000.00 $60,000.00 $60,000.00 $60,000.00
Net income $200,000.00 $213,000.00 $226,600.00 $240,600.00 $296,500.00 $313,500.00
Initial cost of the investment: $600,000.00
Discount rate: 10%