Scenario: Capital Budgeting for Project F

Project F requires an initial investment of $300,000 and is expected to generate the following cash flows over the next 5 years:

• Year 1: $70,000
• Year 2: $80,000
• Year 3: $90,000
• Year 4: $100,000
• Year 5: $110,000

Requirements:

1. Calculate the payback period.
2. Compute the Net Present Value (NPV) assuming a discount rate of 8%.
3. Determine the Internal Rate of Return (IRR).
4. Assess the Profitability Index (PI).