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A logistics company is planning to invest in a fleet of new trucks. The initial...

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Accounting

A logistics company is planning to invest in a fleet of new trucks. The initial outlay is $12,000,000. The expected cash inflows are $4,000,000 in Year 1, $4,000,000 in Year 2, $4,000,000 in Year 3, and $4,000,000 in Year 4. The required rate of return is 9%.

  1. Calculate the NPV of the investment.
  2. Determine the IRR.
  3. If the cost of capital is 9%, should the project be accepted?
  4. Calculate the Profitability Index (PI).
Compute the Payback Period.

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