Question
A. Payback. The company requires all projects to payback within 3 years. Calculate the payback period. Should it be accepted or rejected? B. Discounted Payback.
A. Payback. The company requires all projects to payback within 3 years. Calculate the payback period. Should it be accepted or rejected? B. Discounted Payback. Calculate the discounted payback using a discount rate of 10%. Should it be accepted or rejected?
C. IRR. Calculate the IRR for this project. The companys required rate of return is 10%. Should it be accepted or rejected? D. NPV. Using a 10% required rate of return, calculate the NPV for this project. Should it be accepted or rejected?
E. Calculate the Profitability Index (PI) for this project. Should it be accepted or rejected?
Consider the following cash flows: Year 0 Cash Flow -$8,000 $3,000 6 2 3 4 5 $3,600 $2,700 $2,500 $2,100 $1,600Step by Step Solution
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