Question: Would you accept this project or not? The project has investment of 70,000 as cash outflow with rate of 10% and cash inflow has these

Would you accept this project or not? The project has investment of 70,000 as cash outflow with rate of 10% and cash inflow has these cash stream shown below. The desired payback period is 3 years.

Year Cash Flow

1 18000

2 25000

3 25000

4 20000

a.What would you do if you base your decision on NPV?

b.What would you do if you base your decision on PBP?

c.What would you do if you base your decision on PI?

d.What would be your overall decision?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

The requirements of the case study are detailed in the attachment. The free cash flow of each year of the project is required to determine NPV, IRR, and whether or not to accept the project. MBA 720:...

Would you accept this project or not? The project has investment of 70,000 as cash outflow with rate of 10% and cash inflow has these cash stream shown below. The desired payback period is 3 years....

number 6 attached below , there is also the solution at the end..but just to explain to me how to do this type of problems for the exam thanks CORPORATE FINANCE AND FINANCIAL INSTITUTIONS II part...

A 14-year bond with a coupon rate of 7.8% has a yield of 7.8%. The bond pays coupons semi-annually. What is the price of the bond? Answer:

Define Systematic and unsystematic risk, relative to AMP Ltd and CBA. indetify at least one factor (e.g. items of news) that has affected the systematic risk of the institution in the last five years...

Please anwer parts b, c, d, & e. Integrative-Conflicting Rankings The Flying Growth Company HEC) has been expanding very pyntecent years, and stand in the process. The more your has been for det er...

Top Inc. is interested in developing a new toy.The toys will sell for $25 each and they plan to sell 10 million toys at the end of each year for 4 years.Variable costs are $20 per toy; fixed costs...

The questions were written in the questions.doc file. And there were some links in the questions like as we did during the lecture, so I provided the lecture slides as well. HOMEWORK 5 1) The owner...

c . What does your answer to part b tell you about this project's IRR? ( Select the best answer below. ) A . There are infinite IRRs for this project. B . There is no IRR for such cash flows. C ....

I need to check my work. Thanks for your help! 15 Part 11 Situation Pete Sarino's is considering two Investment opportunities with the following expected cash flowy Project A Unrecovered Project I...

The Fitness Studio, Inc.s 2015 income statement lists the following income and expenses: EBIT = $773,500, interest expense = $100,000 and taxes = $234,500. The firm has no preferred stock outstanding...

Experts in enterprise architecture (EA) describe it as presenting a holistic view of the enterprise rather than representing the organization in silos of business and technology. Do you think this...

5. Nominal versus Real Returns (LO2) What was the average annual return on Canadian stock from 1957 through 2014: 1. In nominal terms? 2. In real terms?

You are lowering two boxes, one on top of the other, down the ramp shown in Figure 5.53 by pulling on a rope parallel to the surface of the ramp. Both boxes move together at a constant speed of 15.0...

A 3-kg box resting on a horizontal shelf is attached to a 2-kg box by a light string as in figure. (a) What is the minimum coefficient of static friction such that the objects remain at rest? (b) If...

Steel is carburized in a high-temperature process that depends on the transfer of carbon by diffusion. The value of the diffusion coefficient is strongly temperature dependent and may be approximated...

Determine the forces P1 and P2 needed to hold the cable in the position shown, i.e., so segment C D remains horizontal. Also, find the maximum tension in thecable. 15 m Im 5 KN 12m

Air at 4.18 kg/m3 enters a nozzle that has an inlet-to exit area ratio of 2:1 with a velocity of 120 m/s and leaves with a velocity of 380 m/s, determine the density of air at the exit.

Determine if the overhead allocated to the product relates to a single plantwide overhead rate method, multiple production department factory overhead rate method, or activity-based costing...

1. The traditional happy ending is the most overt element of wish fulfillment in film structure. Does your script have a happy ending? Come up with several different happy endings to your script each...

4. Try to conceive of all the different ways in which the wishes of your hero can be fulfilled in your script.

3. Is there a deep fear or anxiety that your hero has addressed or extinguished within the course of your script?