Question
4. after completing your cash flow analysis in the previous problem, you email it to your boss. because you have an isu degree, you know
4. after completing your cash flow analysis in the previous problem, you email it to your boss. because you have an isu degree, you know the importance of following up a formal email in person. in the meeting your boss spends a few minutes looking at your report and says that the whole thing is wrong.
your boss gives you the following cash flows, discount rates and required payback period to use to decide on the project( project date ending in 2025)
year 2021 2022. 2023. 2024. 2025
cf -70 20 21. 22. 60
firms req. payback period =2 years
firms req. rate of return =7%
a. compute the payback period to the first decimal point
b. based on the payback rule, should you approve this project?
c. compute the npv of this project
d. based on the npv rule, should you aprove this poject?
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