Question: Year Operating Cash Inflows 0 ($4,000) (Initial outlay) 1 $1,500 2 $1,500 3 $1,500 4 $1,500 5 $1,500 Given the information in Table 4 and

Year

Operating Cash Inflows

0

($4,000) (Initial outlay)

1

$1,500

2

$1,500

3

$1,500

4

$1,500

5

$1,500

  1. Given the information in Table 4 and a 9 percent cost of capital, compute the net present value (NPV).
  2. Calculate the internal rate of return (IRR).
  3. Determine the payback period.
  4. Should the project be accepted based on NPV and IRR criteria?
  5. Compute the accounting rate of return (ARR) if the average investment is $2,000.

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