Year Cash Flow 0 -$82,000.00 (Initial investment) 1 $40,000.00 -$21,000.00 $20,000.00 2 3 4 5 6...

 

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Year Cash Flow 0 -$82,000.00 (Initial investment) 1 $40,000.00 -$21,000.00 $20,000.00 2 3 4 5 6 1. What is the project's payback period? Will you accept the project if the required payback period is 7 years? 2. 3. 4. $30,000.00 -$10,000.00 $23,500.00 5. What is the project's fair value if you require a 5% return? What is the project's NPV? Will you accept the project? Explain why the above two techniques give you different answers. What is the project's IRR? Will you accept this project? Year Cash Flow 0 -$82,000.00 (Initial investment) 1 $40,000.00 -$21,000.00 $20,000.00 2 3 4 5 6 1. What is the project's payback period? Will you accept the project if the required payback period is 7 years? 2. 3. 4. $30,000.00 -$10,000.00 $23,500.00 5. What is the project's fair value if you require a 5% return? What is the project's NPV? Will you accept the project? Explain why the above two techniques give you different answers. What is the project's IRR? Will you accept this project?

Answer rating: 100% (QA)

1 To calculate the projects payback period we need to determine the time it takes for the cumulative cash flow to equal or surpass the initial investment Year 0 8200000 Initial investment Year 1 40000... View the full answer