Question
A firm is considering a project that has an initial investment of $40,000 and is expected to produce cash inflows of $7,500 per year for
A firm is considering a project that has an initial investment of $40,000 and is expected to produce cash inflows of $7,500 per year for 8 years. The firms cost of capital is 12.3%.
1b.What is the projects payback period? If the hurdle rate is 5 years, should the project be accepted?
1c.What is the projects NPV? Based on this, should the project be accepted?
1d.What is the projects PI? Based on this, should the project be accepted?
1e.What is the projects IRR? Based on this, should the project be accepted?
1f. What is the projects modified IRR? Based on this, should the project be accepted?
please answer by hand/ equation if possible. Thank you so much for your time and attention.
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Contemporary Issues In Behavioral Finance
Authors: Simon Grima
1st Edition
1787698823, 978-1787698826
