Question: Scenario: Consider the following financial information for a project: Initial Investment: $20,000 Cost of Capital: 14% Project Life: 6 years Year Cash Flows 1 $5,000

Scenario: Consider the following financial information for a project:

  • Initial Investment: $20,000
  • Cost of Capital: 14%
  • Project Life: 6 years

Year

Cash Flows

1

$5,000

2

$6,000

3

$7,000

4

$8,000

5

$9,000

6

$10,000

Requirements:

  1. Calculate the NPV.
  2. Calculate the IRR.
  3. Compute the Modified Internal Rate of Return (MIRR).
  4. Determine the Discounted Payback Period.
  5. Calculate the PI.

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