Investment Details:
Initial Cost: $4,500
Expected Cash Flows:
•End of Year 1: $1,200
•End of Year 2: $1,300
•End of Year 3: $1,400
•End of Year 4: $1,500
•End of Year 5: $1,600
Discount Rate: 10%
Requirements:
1.Compute the net present value (NPV).
2.Calculate the accounting rate of return (ARR).
3.Determine the discounted payback period.
4.Should the project be accepted based on NPV?
5.Calculate the project's profitability index (PI).