Projected Sales and Costs (in $)

• Initial Investment: $20,000
• Projected Annual Cash Inflows:
  • Year 1: $5,000
  • Year 2: $7,000
  • Year 3: $10,000
  • Year 4: $6,000
  • Year 5: $4,000

Required:

1. Calculate the project's NPV at a 9% discount rate.
2. Compute the IRR for the project.
3. Determine the Profitability Index (PI).
4. Assess if the project should be accepted based on the NPV rule.
5. Perform a scenario analysis assuming cash inflows decrease by 20% each year.