Question: Compute the indicated technique for Project P and recommend whether the firm should accept or reject the project with the cash flows shown as follows

Compute the indicated technique for Project P and recommend whether the firm should accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 10 percent, the maximum allowable payback is 2.5 years, and the maximum allowable discounted payback is 3.0 years.

T=0 T=1 T=2 T=3

FREE CASH FLOW -10,000 5,500 4,840 9,317

Question 1: Payback

Question 2: Discounted Payback

Question 3: Net Present Value

Question 4: Profitability Index

Question 5: Internal Rate of Return

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