You are considering whether or not to invest in a project that will cost 200,000 $...

 

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You are considering whether or not to invest in a project that will cost 200,000 $ in initial investment. You have projected future cash flows as follows: Year 1 2 3 4 Cash In Flow ($) 70,000 110,000 130,000 160,000 Cash Out Flow ($) 60,000 15,000 10,000 10,000 a) (8 pts) What is the payback period for this project? b) (8 pts) If the required rate of return is 21%, is the project mentioned above acceptable? Use NPV. c) (8 pts) Calculate profitability index to determine if the project acceptable. Use 21% interest rate. d) (6 pts) If the required rate of return is accepted as 20%, how this affects the NPV of the project. There is no need for calculation, only make comment. You are considering whether or not to invest in a project that will cost 200,000 $ in initial investment. You have projected future cash flows as follows: Year 1 2 3 4 Cash In Flow ($) 70,000 110,000 130,000 160,000 Cash Out Flow ($) 60,000 15,000 10,000 10,000 a) (8 pts) What is the payback period for this project? b) (8 pts) If the required rate of return is 21%, is the project mentioned above acceptable? Use NPV. c) (8 pts) Calculate profitability index to determine if the project acceptable. Use 21% interest rate. d) (6 pts) If the required rate of return is accepted as 20%, how this affects the NPV of the project. There is no need for calculation, only make comment.

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The image youve provided appears to contain a finance or investment problem with multiple parts requesting calculations of payback period net present value NPV and profitability index as well as a com... View the full answer