Question: 4. A firm is evaluating a project which will cost $7,586 today and provide additional cash flows in years 1,2,3 and 4 of $5,568,$2,586,$2,586, and
4. A firm is evaluating a project which will cost $7,586 today and provide additional cash flows in years 1,2,3 and 4 of $5,568,$2,586,$2,586, and $7,560, respectively. The project will also employ $5,000 in working capital during the life of the project (allocated at the beginning and paid back in the last period). Its salvage value at the end of year 4 will be zero and the company uses a straight-line depreciation schedule. The firm uses a discount rate of 8%. a. What is the chiscounted payback, profitability index, NPV and IRR of the project? (Note: be sure to include working capital in the computations)
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