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If you had a project that cost 40,000 and is expected to yield the follow cash flow over the next three years Year 1: 10,000

  1. If you had a project that cost 40,000 and is expected to yield the follow cash flow over the next three years

Year 1: 10,000

Year 2: 20,000

Year 3: 5,000

Year 3: -3,000 End of Project payment has to be paid

The cost of capital is 12%

  1. Find the NPV and profitability index on this project?

  1. Would you accept or reject this project and why?

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