Question: Please use the following information to answer the remaining problems : Able Corporation has Project A with the following cash flows and a 7.6% cost

Please use the following information to answer the remaining problems:

Able Corporation has Project A with the following cash flows and a 7.6% cost of money: Numbers in parentheses are outflows. Both Year 0 and Year 3 cash flows are outflows.

Year 0 1 2 3 4 5 6

Cash flow $(351,000) $ 95,000 $180,000 $(280,000) $ 280,000 $260,000 $180,000

1.Please calculate the net present value ______________

2.Please calculate the profitability indexes (two decimals please)_________________

3.Please calculate the modified profitability index using the terminal value approach in the textbook (two decimals please)_______________________

4.Please calculate the internal rate of return (two decimals please)_____________________________

5.Please calculate the modified internal rate of return (two decimals please and per the book)________________________

6.Please calculate the payback period (two decimals please)________________________

7.Please calculate the present value payback period (two decimals please)______________________

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!