Project E

• Initial Outlay: $2,500
• Year 1 Cash Flow: $700
• Year 2 Cash Flow: $800
• Year 3 Cash Flow: $900
• Year 4 Cash Flow: $1,000
• Year 5 Cash Flow: $1,100
• Discount Rate: 13%

Requirements:

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