Question

Question 47

A company is considering a new inventory system that will cost $120,000. The system is expected to generate positive cash flows over the next four years in the amounts of $35,000 in year 1, $55,000 in year 2, $65,000 in year 3, and $40,000 in year 4. The firm’s required rate of return is 9%. What is the payback period of this project?

a. 1.95 years

b. 2.46 years

c. 2.99 years

d. 3.10 years

Question 48

Based on the information from Question 47. What is the net present value (NPV) of the project?

		$28,830.29
		$30,929.26
		$36,931.43
		$39,905.28

Question 49

Based on the information from Question 47, what is the internal rate of return (IRR) of this project?

		14.03%
		17.56%
		19.26%
		21.78%

Question 50

Based on the information from Question 47, what is the profitability index (PI) of this project?

		0.87
		1.11
		1.31
		1.83.

Answer 1