You are considering a project with an initial cash outlay and expected free cash flows...
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| You are considering a project with an initial cash outlay and expected free cash flows at the end of each year for 5 years, and the required rate of return for this project as stated below: | ||
| Length of Project | 5 years | |
| Expected Free Cash Flows at the end of each year | 24,000 | |
| Initial Cash Outlay | 105,000 | |
| Required Rate of Retrun | 9.00% | |
| a) What is the projects payback period? Would you accept/reject the project if the maximum acceptable payback period is 5 years? | ||
| b. What is the projects discounted payback period? Would you accept/reject the project if the maximum acceptable discounted payback period is 4 years? | ||
| c. What is the projects NPV? Would you accept/reject the project? | ||
| d. What is the projects PI? Would you accept/reject the project? | ||
| f. What is the projects MIRR if the re-investment rate is 9 percent? Would you accept/reject the project? | ||
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