1. You have the following capital budgeting timeline: 0 = ($21,000), 1 = $6109, 2 = $7276,...

Question:

1. You have the following capital budgeting timeline:

0 = ($21,000),

1 = $6109,

2 = $7276,

3 = ?,

4 = $4902,

5 = $4195,

6 = $6986.

The discounted payback for the timeline is 4.626. k = 9.85%. What is the amount of the missing cash flow in period 3?

2. You have the following budget timeline:

0 = ($25000),

1 = $2000,

2 = $2000,

3 = ?,

4 = $3500,

5 = $5000.

k = 11%.

Assuming that the NPV = ($1850), what is the IRR of this project?

Capital Budgeting
Capital budgeting is a practice or method of analyzing investment decisions in capital expenditure, which is incurred at a point of time but benefits are yielded in future usually after one year or more, and incurred to obtain or improve the...