Question
Background: Innovative Solutions is assessing a project that will cost $350,000 and has a life of 7 years. The expected cash inflows are $70,000 annually.
Background:
Innovative Solutions is assessing a project that will cost $350,000 and has a life of 7 years. The expected cash inflows are $70,000 annually. The company requires a return of 11%.
Requirements:
1.Calculate the NPV.
2.Calculate the IRR.
3.Determine the Payback Period.
4.Calculate the Profitability Index (PI).
5.Conduct a break-even analysis on the annual cash inflows.
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Financial Management Theory and Practice
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason
2nd Canadian edition
176517308, 978-0176517304
