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Calculate the NPV and the Profitability Index

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Reference no: EM133078528

Question 1 - ABC Company has a cost of capital of 15% and considering the following capital expenditure, with estimated cash flows:

Year 0 - 100,000.00

Year 1 60,000.00

Year 2 80,000.00

Year 3 40,000.00

Year 4 30,000.00

Calculate the NPV and the Profitability Index and assess whether this project should be taken.

Question 2 - NPV in Perpetuity - A company with a cost of capital of 14% is considering investing in a project that will cost P500,000 and yield cash flows of P100,000 in perpetuity. Calculate the NPV and assess whether the project should be taken.

Reference no: EM133078528

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