Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Use the information in the table above for the following 5 questions A capital investment project is estimated to have the following after-tax cash flows,

image text in transcribed
image text in transcribed
Use the information in the table above for the following 5 questions A capital investment project is estimated to have the following after-tax cash flows, by year -$30,000 $7,500 $12.500 $5,000 $15.000 The company utilizes a discount rate of 10% to evaluate capital projects. You may have rounding errors in your calculations so choose the closest answer. Assume cash flows occur evenly over the year. 18) The PAYBACK for the project shown above is: a) 2.16 b) 3.33 c) 3.15 d) 2.50 e) 4.50 19) The DISCOUNTED PAYBACK for the project shown above is: a) 2.27 b) 3.39 c) 3.88 d) Does not payback in 4 years. e) 5.61 20) The NET PRESENT VALUE for the project shown above is: a) $1,789 b) $5,672 c) $1,150 d) $3,113 e) $2,721 21) The INTERNAL RATE OF RETURN for the project shown above is: a) 17.92% b) 11.63% c) 8.27% d) 12.81% e) 9.33% 22) The PROFITABILITY INDEX for the project shown above is: a) 0.75 b) 0.89 c) 1.60 d) 2.15 e) 1.03

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Institutions Management And Investments

Authors: Herbert Mayo

10th International Edition

1111820643, 9781111820640

More Books

Students also viewed these Finance questions