Question: Payback 3: You are considering a project with an initial cash outlay of $80,000 and expected free cash flows of $20,000 at the end of
- Payback 3: You are considering a project with an initial cash outlay of $80,000 and expected free cash flows of $20,000 at the end of each year for six years. The expected rate of return for this project is 10%. You have an expected Payback Period of 4 years.
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- What is the projects payback (Undiscounted FCF) and discounted payback periods Discounted FCF)? This is the schedule of outlays and free cash flows over the life of the project. Hint: Complete the table.
- What is the projects NPV?
- What is the projects Discounted Payback Period om years?
- What is the project's IRR (Internal Rate of Return)?
- Do you accept the project? Explain your reasoning.
Please fill in the blanks, thank you!
Payback Period #3 Payback Period Required Rate of Return Project 9-5A Undiscounted FCF Cumulative Discounted FCF Do you accept the project? Year PVIF Discounted FCF 0 Enter "YES" or "NO" here 1 2 Explain your reasoning here. 3 4 5 6 NPV 1 PV Factor = (1+r)" r=rate of return n = number of periods Fraction IRR Discounted Payback Period
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