QUESTION $1$

Highfield Co$.$ is considering a project that will require an initial cash outlay of $$78,120$ today. The project has a five$-$year life and will generate cash flows of $$20,608$ every year for next five years. The required rate of return is $15\%.$ What is the payback period?

a$.3\mathrm{.}7908$

b$.4\mathrm{.}6218$

c$.2\mathrm{.}8706$

d$.3\mathrm{.}9349$

QUESTION $2$

Given the information in Question $1,$ what is the net present value?

a$.$ $$3,790\mathrm{.}80$

b$.$ $$9,038\mathrm{.}79$

c$.-$$$9,038\mathrm{.}79$

d$.$ $$7,812\mathrm{.}03$

QUESTION $3$

Given the information in Question $1,$ what is the internal rate of return?

a$.12\%$

b$.10\%$

c$.6\%$

d$.8\%$

QUESTION $4$

Given the information in Question $1,$ what is the profitability index?

a$.1\mathrm{.}8843$

b$.-0\mathrm{.}8843$

c$.0\mathrm{.}8843$

d$.-1\mathrm{.}8843$

QUESTION $5$

Given the information in Question $1,$ what is the maximum price that Highfield has to pay if the target profitability index is $1\mathrm{.}2?$

a$.$ $$82,098\mathrm{.}45$

b$.$ $$57,567\mathrm{.}68$

c$.$ $$78,120$

d$.$ $$65,248\mathrm{.}13$

QUESTION $6$

Given the information in Question $1,$ what is the minimum annual cash flow that project has to generate in order to accept the project?

a$.$ $$19,376\mathrm{.}93$

b$.$ $$22,403\mathrm{.}52$

c$.$ $$23,304\mathrm{.}41$

d$.$ $$20,608$