A company is considering investing in a new project that requires an initial investment of $200,000. The
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Question:
A company is considering investing in a new project that requires an initial investment of $200,000. The project is expected to generate cash flows of $60,000 at the end of year 1, $80,000 at the end of year 2, and $120,000 at the end of year 3. The company's cost of capital is 10%. Calculate the following:
a) Net Present Value (NPV) of the project. b) Profitability Index (PI) of the project. c) Discounted Payback Period of the project.
Related Book For
Principles of managerial finance
ISBN: 978-0132479547
12th edition
Authors: Lawrence J Gitman, Chad J Zutter
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