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GHI Ltd. is evaluating a project that costs $4,000 initially and is expected to produce cash inflows of $1,500 each year for four years. The
GHI Ltd. is evaluating a project that costs $4,000 initially and is expected to produce cash inflows of $1,500 each year for four years. The cost of capital is 13%.
Requirements:
- Compute the NPV of the project.
- Find the IRR.
- Decide on the project’s acceptance based on NPV and IRR.
- Determine the Payback Period.
- Evaluate the change in NPV if the cash inflows increase by $200 annually.
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