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Your company has projected the following cash flows of project A, B and C as follows. The required rate of return on all projects is

Your company has projected the following cash flows of project A, B and C as follows. The required rate of return on all projects is 13%. Calculate:

Year Project A Project B Project C
0 (90,000) (100.000) (80,000)
1 30,000 40,000 25,000
2 30,000 40,000 20,000
3 30,000 30,000 50,000
4 30,000 30,000 10,000

(i) Net Present Value (NPV). (6 marks)

ii) Profitability Index. (3 marks) (iii) Internal rate of return. (3 marks) (iv) Justified which project we should accept or reject. (3 marks)

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