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Question 5) A project has a required return of 15 percent, an initial cash outflow of $50,000, and cash inflows of $25,000 in Year 1,

Question 5) A project has a required return of 15 percent, an initial cash outflow of $50,000, and cash inflows of $25,000 in Year 1, $0 in Year 2, $18,500 in Year 3 and $16,500 in Year 4. What is the net present value and the Profitability Index of the Project? Based on the information you found, we should accept or reject the project?
(4 Points)
Year Cash Flows
0 $ (50,000.00)
1 $ 25,000.00
2 $ -
3 $ 18,500.00
4 $ 16,000.00
Required Return 15.00%
NPV ($6,042.41)
Profitability Index (PI) 0.86

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