Selling 9th Edition by Stephen Castleberry,John Tanner

Exercise 15

Assume that you are selling a complete line of canoes and kayaks to a large outfitter to replace all of their current units. The total costs will be $125,000. You expect that repairs will drop by $25,000 a year over the next 10 years. At the outfitter's cost of capital, the discounted cash inflows have a value today of $215,000. Use this information to calculate the following:
a. Return on investment.
b. Payback period.
c. Net present value.