Question

Prepare a capital budget of the company. It wants to invest to an extended project which required an investment of $1,000,000. The company is expecting a cash inflow for next 6 years as $200,000, $300,000, $ 400,000 $ $450,000, $500,000 and $400, 000, respectively. If the company has a cost capital as 11%, determine the simple payback period, discounted payback period, Accounting rate of return, Net present value, Internal rate of return and profitability Index