A firm is considering investing in a project with the following cash flows: Year Net cash...

 

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A firm is considering investing in a project with the following cash flows: Year Net cash 1 2 3 4 5 6 7 8 2,000 3,000 4,000 3,500 3,000 2,000 1,000 1,000 flow ($) The project requires an initial investment of $12,500, and the firm has a required rate of return of 40 percent. Compute a) the payback (30 points), b) discounted payback (30 points) and c) net present value and determine whether the project should be accepted (40 points). A firm is considering investing in a project with the following cash flows: Year Net cash 1 2 3 4 5 6 7 8 2,000 3,000 4,000 3,500 3,000 2,000 1,000 1,000 flow ($) The project requires an initial investment of $12,500, and the firm has a required rate of return of 40 percent. Compute a) the payback (30 points), b) discounted payback (30 points) and c) net present value and determine whether the project should be accepted (40 points).

Answer rating: 100% (QA)

Project Investment Analysis a Payback Period The payback period is the number of years it takes for ... View the full answer