Report
This report shows several investment technique such as Payback Period, Profitability Index, Internal Rate of Return and Net Present Value in making a decision whether to accept the investment or not .
Net Present Value (NPV) is the most accurate technique among all capital budgeting methods . If the project shows a positive net present value, the project shall be accepted. If the project shows a negative net present value, the project shall be decline. According to the result, the NPV for the entire project is $18,966,495.56.

Internal Rate of Return (IRR) is the discount rate often used in capital budgeting that makes the net present value of all cash flows from a particular project equal to zero. Generally speaking, the higher a project's internal rate of return, the more desirable it is to undertake the project. As such, IRR can be used to rank several prospective projects a firm is considering. Assuming all other factors are equal among the various projects, the project with the highest IRR would probably be considered the best and undertaken first.

Based on the case, the result shows a 28.16 % IRR which is 16.28 % more than the required rate of return, 12 %. If IRR is chosen as the method of valuation for this project, then this project should be accepted because the IRR is higher than the required rate of return.

Profitability Index assumes that the cash flow calculated does not include the investment made in the project, a profitability index of 1 indicates breakeven. Any value lower than one would indicate that the project's PV is less than the initial investment. As the value of the profitability index increases, so does the financial attractiveness of the proposed project.

The PI for this project is 1.39, therefore it’s positive and show more than 1.0 , so if profitability index is use to evaluate the project, the smart phone business