Question

- Compute the Payback period, NPV, IRR, and PI and give accept/reject decision for the following project. The cost of capital is 10 percent. Assume the policy payback period is 3 years.

Year | Cash Inflow (Outflow) |

0 | (400) |

1 | 100 |

2 | 200 |

3 | 200 |

4 | 300 |

Answer #1

Calc:

The project should be accepted as NPV is positive

(Payback
period, NPV, PI, and IRR
calculations)
You are considering a project with an initial cash outlay of
$75,000
and expected free cash flows of
$26,000
at the end of each year for
5
years. The required rate of return for this project is
7
percent.
a. What is the project's payback period?
b. What is the project's
NPV?
c. What is the project's
PI?
d. What is the project's
IRR?

(Payback period, NPV, PI, and IRR calculations) You are
considering a project with an initial cash outlay of $80,000 and
expected free cash flows of $26,000 at the end of each year for 6
years. The required rate of return for this project is 7
percent.
a. What is the project's payback period?
b. What is the project's NPV?
c. What is the project's PI?
d. What is the project's IRR?
a. The project's payback period is nothing years. (Round...

Compute the Discounted Payback statistic for Project X and
recommend whether the firm should accept or reject the project with
the cash flows shown below if the appropriate cost of capital is 10
percent and the maximum allowable discounted payback is 3 years.
Time: 0 1 2 3 4 5 Cash flow: -1,000 500 480 400 300 150
2.98 years,accept
4.98 years, reject
3.49 years, reject
2.49 years, accept

Compute the NPV for Project X and accept or reject the project
with the cash flows shown below if the appropriate cost of capital
is 10 percent.
Time
0
1
2
3
4
5
Cash Flow
-1000
-75
100
100
0
2000
Group of answer choices
$331.44
$-639.96
$392.44
$486.29

A project has the following cash flows. What is the payback
period, NPV, PI, IRR, MIRR, and EAA? Assume an interest rate of
5%.
Year CF ($)
0) -5,000
1). 2,700
2). 3,300
3) 1,400
4). 330
5) 340
Also upload your excel files showing your work.

Compute the Payback statistic for Project X and recommend
whether the firm should accept or reject the project with the cash
flows shown below if the appropriate cost of capital is 12 percent
and the maximum allowable payback is 4 years.
Time:
0
1
2
3
4
5
Cash flow:
-3,100
950
700
850
725
625
Multiple Choice
3.83 years, Reject
2.83 years, Accept
2.83 years, Reject
3.83 years, Accept

Compute the Discounted Payback statistic for Project X and
recommend whether the firm should accept or reject the project with
the cash flows shown below if the appropriate cost of capital is 10
percent and the maximum allowable discounted payback is 3
years.
Time:
0
1
2
3
4
5
Cash flow:
-1,000
400
580
500
400
250
3.42 years, reject
4.72 years, reject
2.42 years, accept
2.72 years, accept

Compute the PI
statistic for Project X and note whether the firm should accept or
reject the project with the cash flows shown below if the
appropriate cost of capital is 10 percent.
Time
0
1
2
3
4
5
Cash Flow
-250
75
0
100
75
50

Compute the PI statistic for Project X and note whether the firm
should accept or reject the project with the cash flows shown below
if the appropriate cost of capital is 11 percent. Time: 0 1 2 3 4 5
Cash flow: -78 -78 0 113 88 63 51.00%, accept 29.71%, accept
38.09%, accept 11.00%, reject

Compute the Payback statistic for Project X and recommend
whether the firm should accept or reject the project with the cash
flows shown below if the appropriate cost of capital is 12 percent
and the maximum allowable payback is 4 years.
Time:
0
1
2
3
4
5
Cash flow:
-2,100
350
700
800
750
525

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