GHI Ltd is evaluating a project that costs $4,000 initially and is expected to produce cash inflows of $1,500 each year for four years The cost of capital is 13 Requirements Compute the NPV of the project Find the IRR Decide on the projects acceptance based on NPV and IRR Determine the Payback Period Evaluate the change in NPV if the cash inflows increase by $200 annually

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Question: GHI Ltd. is evaluating a project that costs $4,000 initially and is expected to produce cash inflows of $1,500 each year for four years. The

GHI Ltd. is evaluating a project that costs $4,000 initially and is expected to produce cash inflows of $1,500 each year for four years. The cost of capital is 13%.

Requirements:

Compute the NPV of the project.
Find the IRR.
Decide on the project’s acceptance based on NPV and IRR.
Determine the Payback Period.
Evaluate the change in NPV if the cash inflows increase by $200 annually.

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