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HAS TO BE SOLVED USING BA II FINANCE CALCULATOR PLEASE SHOW ALL KEY STROKES!!! Thanks! Problem # 2 (12 points): Consider the following series of
HAS TO BE SOLVED USING BA II FINANCE CALCULATOR PLEASE SHOW ALL KEY STROKES!!! Thanks!
Problem # 2 (12 points): Consider the following series of cash flows, for a firm having a cost of capital of 12%. (Negative cash flows are shown in parentheses). The project is being evaluated on a simple accept-vs-reject basis. Please note that in each part of this question, you are being requested BOTH to provide the appropriate calculations, AND to determine whether the project would be accepted or rejected under a given decision rule. Year Cash Flow OOOOO OWN 1 2 3 4 5 6 7 8 9 10 (500,000) 120,000 120,000 120,000 120,000 120,000 160,000 160,000 160,000 (175,000) 750,000 a. Find the Net Present Value (to the nearest $0.01). Would the NPV rule tell you to accept or reject the project? b. Find the Payback Period (to the nearest 0.01 year). If the maximum acceptable payback period is 5 years, is this project accepted or rejected? c. Find the Discounted Payback Period (to the nearest 0.01 year). If the maximum acceptable discounted payback period is 5 years, is this project accepted or rejected? d. Find the Internal Rate of Return (to the nearest 0.01%). Would the IRR rule tell you to accept or reject the project? e. Find the Modified Internal Rate of Return (to the nearest 0.01%). Would the MIRR rule tell you to accept or reject the projectStep by Step Solution
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