Question 5.

Having calculated the WACC in the previous question, use that number to calculate the answer to the following question.

Rodgers Corporation is looking at a potential new project. The initial cash outlay for this project would be $11,000. The project is expected to have a 5-year life. The cash flows for the project are as follows:

Year 1: $5,200

Year 2: $4,000

Year 3: $2,300

Year 4: $1,500

Year 5: $1,200

Using the calculator, please compute:

NPV

IRR

Profitability Index (PI)

MIRR

Regular Payback Period

Discount Payback Period.

Should the company accept the project and why?

NPV =

IRR =

PI =

MIRR =

Regular Payback =

Discounted Payback =

Should the company go forward with the project?