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Akrobeto Company Ltd is considering an investment of GHS 350,000 in a startup. The following cash flows are expected. Year GHS 1 50,000 2 100,000

Akrobeto Company Ltd is considering an investment of GHS 350,000 in a startup. The following cash flows are expected.

Year GHS
1 50,000
2 100,000
3 200,000
4 150,000

a) Assume that the enterprise maintains a debt-to-equity ratio of 3:2. If the interest rate on a bank loan is 8% and the cost of equity is 10%, what will be the Net Present Value (NPV) of the investment? b) What is the Internal Rate of Return (IRR) for the project? c) Reinvesting at cost of capital, what will be the Modified Internal Rate of Return (MIRR) for the proposed investment? d) What will be your overall advice concerning the viability of the project?

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