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Consider an investment that costs 1 0 0 , 0 0 0 and has a cash inflow of 2 5 , 0 0 0 every
Consider an investment that costs and has a cash inflow of
every year for years. The required return is and payback cutoff is years.
a What is the payback period?
b What is the r
c What is the AAR?
d What is the discounted payback period?
e What is the NPV
f What is the IRR?
g What is the PI
h What method should be the primary decision rule? Should we accept the project?
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