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The Great Eastern Toys Company is evaluating a new product. The cash flows are expected from this product over its five years' expected life are

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The Great Eastern Toys Company is evaluating a new product. The cash flows are expected from this product over its five years' expected life are shown Note that the final years cash flow includes $2,000 of working capital to be re ered at the end of the project. 10. Investment criteria. recov. Now End-of-Year 1 to 4 End-of Year S Cash Flow -$18,000 5,200 7,200 a. Compute the following measures: 1. Payback period 2. Discounted payback period at a 10 percent discount rate 3. Net present value at a 10 percent discount rate 4. Internal rate of return 5. Profitability index b. Should the project be undertaken

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