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Year 0 1 2 3 4 Cash Flow - $75,000 15,000 12,000 45,000 12,000 Assume the interest rate is 9%. Referring to the table
Year 0 1 2 3 4 Cash Flow - $75,000 15,000 12,000 45,000 12,000 Assume the interest rate is 9%. Referring to the table above: Question 1: Find the NPV of the project. Show the formulas. Should you accept the project? Question 2: Find the IRR of the project. Show the formulas. Should you accept the project? Question 3: Find the PI of the project. Show the formulas. How can you interpret the answer? Should you accept the project? Question 4: Find the exact discounted payback period (hint: first, express all CF in terms of Year 0 CF, then use the exact payback period formula (A+B/C) like we did in class). Show your work. Should you accept the project if the preset limit is 4 years?
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