A company has the following financial data for Project B:
•Initial investment: $300,000
•Net cash inflows:
oYear 1: $90,000
oYear 2: $70,000
oYear 3: $80,000
oYear 4: $100,000
oYear 5: $90,000
Required:
1.Calculate the Payback Period.
2.Determine the Net Present Value (NPV) if the discount rate is 8%.
3.Compute the Internal Rate of Return (IRR).
4.Assess the profitability index if the discount rate is 8%.
5.Evaluate if the project should be accepted based on NPV and IRR.