capital budgeting. a what is the payback period on the investment b. what is the net present value of this investment c. what is the benefit cost ration (profitability index) of this investment d. what is the internal rate of return (IRR) of this investment e. based on the companys criterion, should it pursue this investment?

A A Paste General BIU- e Copy - Format Painter Clipboard 9- Wrap Text 19 - A-EEE 2 Merge & Center Normal 3 Note 2 Normal $ - % Normal 2 8. Conditional Format as Good Formatting Table Neutral Calculation Checko Font F Alignment Number Styles F27 A G H J K IL 1 2 B C D E F Assignment 6.4 Exercises Problem 10: Capital Budgeting 15 Points The expected free cash flow from an investment is shown in the table below: $ 3 4 5 6 7 8 9 10 11 12 13 14 Year 1 2 3 4 5 6 7 8 Cash Flow 75,000.00 200,000.00 275,000.00 350,000.00 375,000.00 250,000.00 175,000.00 100,000.00 $ $ S The cost of this investment is $1 million. The company's Board of Directors requires an 11% return on all investments. 15 16 17 18 19 a) What is the Payback period of this investment? b) What is the Net Present Value of this investment? c) What is the Benefit Cost Ratio (Profitability Index) of this investment? d) What is the Internal Rate of Return (IRR) of this investment? e) Based on the company's criterion, should it pursue this investment? Create your Original Solution Below - Be sure to show all calculations and clearly indicate answers 20 21 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 #8 #9 #10 #7 #5 44 #6 #3 11