Cash Flow Intuition A project has an initial cost of 1, has required return of R, and

Question:

Cash Flow Intuition A project has an initial cost of 1, has required return of R, and pays C annually for N years.

a. Find C in terms of l and N such that the project has a payback period just equal to its life.

b. Find C in terms of I, N, and R such that this is a profitable project according to the NPV decision rule.

c. Find C in terms of I, N, and R such that the project has a benefit-cost ratio of 2.

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,...