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Suppose you are given the following information about cash flows for an investment opportunity (5 Marks): Year 0 1 2 3 Cash flow ()

Suppose you are given the following information about cash flows for an investment opportunity (5 Marks): Year 0 1 2 3 Cash flow () -14,000 7,300 6,900 5,700 a) What is the discounted payback period for the above project if the relevant discount rate is 10 per cent? b) What is the profitability index for the project if the relevant discount rate is 10 per cent? c) What is the profitability index if the discount rate change to 15 per cent or 22 per cent?

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