Project K has a cost of $52,125, and its expected net cash inflows are $12,000 per year

Question:

Project K has a cost of $52,125, and its expected net cash inflows are $12,000 per year for eight years.

a. What is the project’s payback period (to the closest year)?

b. If the required rate of return for the project is 12 percent, what is the project’s NPV?

c. What is the project’s IRR?

d. What is the project’s discounted payback period, assuming a 12 percent required rate of return?

Payback Period
Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...