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Investment Analysis : Initial Cost : $10,000 Cash Flow Projections : Year 1: $2,200 Year 2: $2,300 Year 3: $2,400 Year 4: $2,500 Year

Investment Analysis: Initial Cost: $10,000
 Cash Flow Projections:

  • Year 1: $2,200
  • Year 2: $2,300
  • Year 3: $2,400
  • Year 4: $2,500
  • Year 5: $2,600

Cost of Capital: 15%

Requirements:

  1. Calculate the net present value (NPV).
  2. Compute the internal rate of return (IRR).
  3. Determine the discounted payback period.
  4. Evaluate the profitability index (PI).
  5. Should the project be accepted based on IRR?

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