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Trans Jamaica Ltd. has a project which has the following cash flows: Year Cash Flow 0 - $200,000 1 - $50,000 2 - $100,000 3

Trans Jamaica Ltd. has a project which has the following cash flows: Year Cash Flow 0 - $200,000 1 - $50,000 2 - $100,000 3 - $150,000 4 - $40,000 5 - $25,000 The cost of capital is 10 percent. 1a. Calculate the NPV, profitability index and the payback period. Would you invest in this project explain? 1b. If the cost of capital change to 16%, would you invest? Explain. 1c. State two advantages and two disadvantages of NPV.

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