Question
Satyam project requires an investment of $25,000 and has an expected life of 4 years. Ignore tax. Annual cash flows at the end of each
Satyam project requires an investment of $25,000 and has an expected life of 4 years. Ignore tax. Annual cash flows at the end of each year are as follows: Year Amount in $ 1 9,000 2 5,000 3 8,000 4 9,000 Discount Rate 12% REQUIRED 1. Compute the payback period assuming that the cash flows occur evenly throughout the year 2. Find the discounted Payback Period 3. What is the Net Present Value and the Profitability index. 4. Find the IRR of this project. Is it profitable? 5. Determine the accounting rate of return for the project based on the initial investment.
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