Question: Last month, Lloyd's Systems analyzed the project whose cash flows are shown below. It is 100% debt financed. The tax rate is 25%. The yield

Last month, Lloyd's Systems analyzed the project whose cash flows are shown below. It is 100% debt financed. The tax rate is 25%. The yield on company`s bond is 16%

Year 0 1 2 3 Cash flows -$1,100 $460 $480 $510

Calculate the projects NPV, Profitability ratio and decide whether you accept it or not. If the payback period acceptable for a company in 3 years, would you accept a project, being based on discounted cash flows?

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