Calculate the irr and assess its acceptability

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Thomas Company is considering a project. The firm, which has a 12% cost of capital and a policy of 5 years maximum time to reach payback, has estimated its cash flows as shown in the following table.

Initial investment (CF0) $130,000

Year (t) Cash inflows (CFt)

1 $25,000

2 35,000

3 45,000

4 50,000

5 55,000

a. Calculate the payback period & discounted payback period and assess its acceptability.

b. Calculate the NPV & Profitability Index and assess its acceptability.

c. Calculate the IRR and assess its acceptability.

Reference no: EM132651987

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