Question
Question 4 (Total marks =15) You are evaluating an investment project, Project XX, with the following cash flows: Period Cash Flow 0 -$200,000 1 $65,000
Question 4 (Total marks =15) You are evaluating an investment project, Project XX, with the following cash flows: Period Cash Flow 0 -$200,000 1 $65,000 2 $65,000 3 $65,000 4 $65,000 5 -$65,000 Calculate the following: (a). Payback period ( 2 marks) (b). Calculate the discounted cash flows for each year, assuming a 10% discount rate. (3 marks) (c) Discounted payback period, assuming a 10% cost of capital. (2 marks) (d) .Net present value, assuming a 10% cost of capital. (2 marks) (e). Profitability index, assuming a 10% cost of capital. (2 marks) (f). Modified internal rate of return, assuming reinvestment at 10%. (4 marks)
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