You are given the following cash flows for the project: Time 0 Time 1 Time 2 Time 3 Time 4 -115,000 30,000 50,000 50,000 20,000 If the If the required rate...

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Finance

You are given the following cash flows for the project:
Time 0
Time1
Time2
Time3
Time4
-115,000
30,000
50,000
50,000
20,000
If the If therequired rate of return is 13%, (1) what is the payback period, (2)what is the NPV, (3) what is the IRR, and (4) what is theProfitability Index (PI). Should we accept the project?

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Comments Payback period 270 Years Payback period is within 4 years lifeSoon payback period it is acceptable NPV 2375 NegativeSo on this basis project is not acceptable IRR 1198 IRR is less than See Answer

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Transcribed Image Text

You are given the following cash flows for the project:Time 0Time1Time2Time3Time4-115,00030,00050,00050,00020,000If the If therequired rate of return is 13%, (1) what is the payback period, (2)what is the NPV, (3) what is the IRR, and (4) what is theProfitability Index (PI). Should we accept the project?

Time 0	Time1	Time2	Time3	Time4
-115,000	30,000	50,000	50,000	20,000