Comparing all

methods.

Risky Business is looking at a project with the estimated cash flow as? follows:

Initial investment at start of? project:?? ?$10,900,00 Cash flow at end of year? one:?? ?$1,853, 000 Cash flow at end of years two through? six:?? ?$2,180,000 each year Cash flow at end of years seven through? nine:?? ?$2,408, 900, each year Cash flow at end of year? ten:?? ?$1,853,000

Risky Business wants to know the payback? period, NPV,? IRR, and PI of this project. The appropriate discount rate for the project is

12%

If the cutoff period is six years for major? projects, determine whether the management at Risky Business will accept or reject the project under the five different decision models.