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Question 4, (Capital Budgets) 20 Marks Given the following cash-flow information on Project C, answer the questions below. Year Project 0-$10,000 Initial investment 1 $3,500

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Question 4, (Capital Budgets) 20 Marks Given the following cash-flow information on Project C, answer the questions below. Year Project 0-$10,000 Initial investment 1 $3,500 2 $3,500 3 $3,500 4 $3,500 Assuming an interest rate (discount rate) of 10% calculate the following: a) Calculate the net present value (NPV) of the project b) List the steps involved in calculating and interpreting the NPV's c) Calculate the internal rate of return of the project d) If the required rate of return is 10%, should the project be accepted or rejected? e) Calculate the pay back period

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