The following instruction is for Question 1.

Comparing all methods. Risky Business is looking at a project with the estimated cash flows as follows: Initial Investment at start of project: $3,600,000 Cash Flow at end of Year 1: $500,000 Cash Flow at end of Years 2 through 6: $525,000 each year Cash Flow at end of Year 7 through 9: $530,000 each year Cash Flow at end of Year 10: $385,000 Risky Business wants to know payback period, NPV, IRR, Payback of this project. The appropriate discount rate for the project is 14%.

If the cutoff period is six years for major projects, determine whether management at Risky Business will accept or reject the project under the four different decision models.

Please submit the following:

IRR (in percentage format)=

NPV (in dollar amount)=

Payback Period (in years)=

Discount Payback Period= (in years)

Recommend? Yes/No