Need help by 6 p.m. 10/13/05. Must show all calculations.

2. Nick Chetwynde?s company is considering the purchase of a piece of
equipment and Nick has been assigned the task of determining if the
purchase is a reasonable candidate to propose for the capital budget.
The investment cost would be $198,000. The expected operating cash
flows (only) for the eight years during which the company expects to
own the machine are set out in the following table:

Year	Cash Flow
1	$86,000
2	72,000
3	60,000
4	60,000
5	45,000
6	45,000
7	20,000
8	10,000

The company is going to depreciate the equipment to zero salvage value
at the end of the eight years. It assumes that at that time it will
have to pay $3,000 to have the equipment hauled away. The discount
rate to be used in all calculations, derived from the company?s
estimated marginal cost of capital, is 9%. All the figures given here,
including the terminal hauling charge, are bottom-line, net of taxes.


A. Calculate the ordinary payback period, in years and months, for
this equipment. (Report your result to the nearest half-month.)


B. Calculate the discounted payback period, in years and months.
(Report your result to the nearest half-month.)

C. Calculate the Net Present Value of this equipment to the nearest
dollar. (See the doc sharing area for a calculator guide to using the
BAII+ for cash flows.)


D. Explain why, based on the NPV you calculated in C, the equipment
is, or is not, an acceptable candidate for capital funding.


E. Calculate the Internal Rate of Return on the investment to the
nearest one-tenth of one percent. (

F. Explain why, based on the IRR, the equipment is or is not an
acceptable candidate for capital funding.


G. Calculate the Modified Internal Rate of Return to the nearest
one-tenth of one percent.


H. Explain why the MIRR you calculated in G is, or is not, different
from the IRR you calculated in F.