Question
A company invests $5,000 in a project expected to generate the following cash inflows over the next 4 years: Year 1: $2,000 Year 2: $2,000
A company invests $5,000 in a project expected to generate the following cash inflows over the next 4 years:
- Year 1: $2,000
- Year 2: $2,000
- Year 3: $2,000
- Year 4: $2,000
The company’s cost of capital is 14%. Calculate:
a. Net present value (NPV). b. Internal rate of return (IRR). c. Modified internal rate of return (MIRR). d. Payback period. e. Should the company proceed with this investment?
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Managerial Economics
Authors: Paul Keat, Philip K Young, Steve Erfle
7th edition
0133020266, 978-0133020267
