With the following capital budgeting elements, identify the cash outflows and cash inflows that you would use

Question:

With the following elements, identify the cash outflows and cash inflows that you would use to judge the project by using the time-value-of-money yardsticks. Also, calculate the projects
(1) ,
(2) Internal rate of return,
(3) Payback period,
(4) Profitability index.
Capital assets ($2.5 million), capital additions in year 1 ($300,000), working capital in year 1 ($600,000) and year 2 ($300,000), salaries ($140,000), working capital loan ($190,000), residual value at the end of the 11th year ($2 million), profit for the year ($400,000), mortgage ($1.1 million), non-cash expense ($60,000), revenue ($300,000), and sunk costs ($100,000). The project’s lifespan is 10 years and the is 8%. Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at... Capital Budgeting
Capital budgeting is a practice or method of analyzing investment decisions in capital expenditure, which is incurred at a point of time but benefits are yielded in future usually after one year or more, and incurred to obtain or improve the... Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...