Question
Consider the Following 10-year project: Year Cash Flow 0 -30000 1 2500 2 5000 3 6750 4 7000 5 7250 6 6000 7 6250 8
| Consider the Following 10-year project: | ||
| Year | Cash Flow |
|
| 0 | -30000 |
|
| 1 | 2500 |
|
| 2 | 5000 |
|
| 3 | 6750 |
|
| 4 | 7000 |
|
| 5 | 7250 |
|
| 6 | 6000 |
|
| 7 | 6250 |
|
| 8 | 8000 |
|
| 9 | 3750 |
|
| 10 | 2000 |
|
1. What is the Payback Period for the project? Would you accept this project if the cut-off is 5 years?
2. What is the NPV of the project if the required rate of return is 12%?
3. What is the PI of the project?
4. What is the IRR of the project?
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Money Banking And Financial Markets
Authors: Stephen Cecchetti, Kermit Schoenholtz
3rd Edition
007337590X, 9780073375908
