Question
A project will cost $1,000 today and will pay back $100 one year from today (t=1), $200 two years from today (t=2), $500 three years
A project will cost $1,000 today and will pay back $100 one year from today (t=1), $200 two years from today (t=2), $500 three years from today (t=3) and $1,000 four years from today (t=4). If the required rate of return is 7%, answer question Q1 to Q5.
Q1: What is the present value of the future cashflow?
a)1578.62
b)1439.19
c)1374.25
d)1664.83
Q2: What is the NPV of the project
a)439.19
b)1439.19
c)578.62
d)1374.25
Q3: What is the IRR of the project?
a)21.75%
b)15.39%
c)16.84%
d)19.77%
Q4: What is the payback period of the project?
a)3.5
b)3.2
c)3.8
d)4
Q5: How long is the Discounted Payback Period
a)3.28
b)3.42
c)4
d)2.77
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started