A project will last for four years. The initial cash investment will be $240. The project will provide a net income of $80 for each of the four years. Depreciation will be on a straight-line basis over the four years, and there will be no salvage value. The required rate of return is 10 percent.

1. What will be the total net income over the life of the project?

2. What will be the average accounting return (in %)

3. What will be the operating cash flow (OCF) for all four years (not adjusted for time)?

4. What will be the net present value?

5. What will be the payback period (assume funds come in daily)?

6. What will be the discounted payback period?

7. What will be the profitability index?

Answer rating: 100% (QA)

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