Question
A firm is starting a new project that will cost $200,000. It is projected to last 5 years and to generate cash flows of $50,000,
A firm is starting a new project that will cost $200,000. It is projected to last 5 years and to generate cash flows of $50,000, $70,000, $90,000, $50,000 and $30,000 from Years 1 through 5 respectively. If the discount rate is 10%.
a) what is the payback period of this project? Round to the second decimal place.
b) what is the PI of this project? Round to the second decimal place.
c) what is the NPV of this project? Round to the nearest penny.
d) what is the IRR of this project? Answer in the percent format. Round to the hundredth decimal place.
e) what is the EAA of this project? Round to the nearest penny.
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