Question 3 A software firm is evaluating a project that needs an initial investment of $120,000 The expected net cash flows for the project are shown below Assume the company's cost of capital is 9 Calculate and comment on the project's NPV, IRR, and discounted payback period Year Cash Flows Discount Factor (9 ) 1 $30,000 0 917 2 $35,000 0 842 3 $40,000 0 772 4 $45,000 0 708 5 $40,000 0 650 Salvage Value $10,000 0 650 Requirements Calculate the Net Present Value (NPV) Determine the Internal Rate of Return (IRR) Compute the discounted payback period Provide a brief commentary on the investment decision based on NPV and IRR

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Question: Question 3 A software firm is evaluating a project that needs an initial investment of $120,000. The expected net cash flows for the project are

Question 3

A software firm is evaluating a project that needs an initial investment of $120,000. The expected net cash flows for the project are shown below. Assume the company's cost of capital is 9%. Calculate and comment on the project's NPV, IRR, and discounted payback period.

Year	Cash Flows	Discount Factor (9%)
1	$30,000	0.917
2	$35,000	0.842
3	$40,000	0.772
4	$45,000	0.708
5	$40,000	0.650
Salvage Value	$10,000	0.650

Requirements:

Calculate the Net Present Value (NPV).
Determine the Internal Rate of Return (IRR).
Compute the discounted payback period.
Provide a brief commentary on the investment decision based on NPV and IRR.

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