Question
The CS Hightech is planning a new investment project which is expected to yield cash inflows of $335,000 per year in Years1 through 5, $266,000
The CS Hightech is planning a new investment project which is expected to yield cash inflows of $335,000 per year in Years1 through 5, $266,000 per year in Years 6 through 9, and $218,000 in Years 10 through 15. This investment will cost the company $2,500,000 today (initial outlay). We assume that the firm's cost of capital is 8.5%
Question 1: Draw a timeline to show the cash flows of the project.
Question 2: Compute the project's payback period, net present value (NVP), profitability index (PI), internal rate of return (IRR), and modified internal rate of return (MIRR).
Question 3: Discuss whether the project should be taken.
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Introduction to Corporate Finance What Companies Do
Authors: John Graham, Scott Smart
3rd edition
9781111532611, 1111222282, 1111532613, 978-1111222284
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