Assume the interest rate is 9 %. 

Question 1: Find the NPV of the project. Show the formulas. Should you accept the project?

Question 2: Find the IRR of the project. Show the formulas . Should you accept the project?

Question 3: Find the PI of the project. Show the formulas . How can you interpret the answer? Should you accept the project? 

Question 4: Find the exact discounted payback period (hint: first, express all CF in terms of Year 0 CF, then use the exact payback period formula (A+B/C) like we did in class ) . Show your work. Should you accept the project if the preset limit is 4 years

Year Cash Flow

0   $-75,000 

1  15,000 

2 12,000

 3 45,000 

4 12,00

Answer rating: 100% (QA)

To calculate the answers to the given questions we need to use the following formulas NPV Cash Flow 1rt Initial Investment IRR is the discount rate at ... View the full answer