Project R requires an investment of $45,000 and is expected to produce after tax cash inflows of $15,000 per year for five years The cost of capital is 10 percent a Determine the payback period, the net present value , and the profitability index for Project R Is the project acceptable b Now, assum...

a NPV 15000 PVIFA 105 45000 15000 3791 45000 11865 NPV ...

Project R requires an investment of $45,000 and is expected to produce after-tax cash inflows of $15,000

Question:

Project R requires an investment of $45,000 and is expected to produce after-tax cash inflows of $15,000 per year for five years. The is 10 percent.
a. Determine the payback period, the , and the profitability index for Project R. Is the project acceptable?
b. Now, assume that the appropriate risk-adjusted is 14 percent. Calculate the risk-adjusted . Is the project acceptable after adjusting for its greater risk?
c. Calculate the approximate internal rate of return.
Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at... Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of... Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...