A project that costs $2,400 to install will provide annual cash flows of $590 for the...

 

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A project that costs $2,400 to install will provide annual cash flows of $590 for the next 5 years. The firm accepts projects with payback periods of less than 5 years. a. What is this project's payback period? Note: Round your answer to 3 decimal places. b. Will the project be accepted? e-1. What is the project NPV if the discount rate is 4%? Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places. c-2. Should this project be pursued? d-1. What is the project NPV if the discount rate is 11%? Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places. d-2. Should this project be pursued? e. Will the firm's decision change as the discount rate changes? a. Payback period Years b. Will the project be accepted? Yes c-1. NPV of the project if the discount rate is 4% + c-2. Should this project be pursued? Yes d-1. NPV of the project if the discount rate is 11% d-2. Should this project be pursued? No e. Will the firm's decision change as the discount rate changes? Yes A project that costs $2,400 to install will provide annual cash flows of $590 for the next 5 years. The firm accepts projects with payback periods of less than 5 years. a. What is this project's payback period? Note: Round your answer to 3 decimal places. b. Will the project be accepted? e-1. What is the project NPV if the discount rate is 4%? Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places. c-2. Should this project be pursued? d-1. What is the project NPV if the discount rate is 11%? Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places. d-2. Should this project be pursued? e. Will the firm's decision change as the discount rate changes? a. Payback period Years b. Will the project be accepted? Yes c-1. NPV of the project if the discount rate is 4% + c-2. Should this project be pursued? Yes d-1. NPV of the project if the discount rate is 11% d-2. Should this project be pursued? No e. Will the firm's decision change as the discount rate changes? Yes