Comparing all

methods.

Risky Business is looking at a project with the following estimated cash flow:

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.

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

9%.

If the cutoff period is

6

years for major projects, determine whether the management at Risky Business will accept or reject the project under the five different decision models.

Initial investment at start of project:

$13,500,000

Cash flow at end of year one:

$2,295,000

Cash flow at end of years two through six:

$2,700,000

each year

Cash flow at end of years seven through nine:

$2,754,000

each year

Cash flow at end of year ten:

$1967143