FINC 5810

Problems 6 to 12 A proposed project requiring an initial outlay of $330,000 will provide the following year-end cash flows (remember that the initial outlay and year 3 are negative cash flows) Year 1 2 3 4 5 7 Cash Flows $140,000 $142,000 $150,000 $-435,000 $265,000 $180,000 S321,000 Using a 5.6% required return, please compute the net present value Is the investment desirable? 7. Using a 5.6% required return, please compute the profitability index for the above investment Using a 5.6% required return, please compute the modified profitability index for the above investment Please compute the internal rate of return for the above investment 10. Using a 5.6% required return, please compute the modified internal rate of return for the above investment (using the method described in the text that take the inflows and outflows to terminal value - not the preprogramed MIRR function in Excel which bring the inflows and outflows to present values). 11. Please compute the payback period for the above investment 12. Using a 5.6% required return, please compute the present value payback period for the above investment