Calculate the project net present value of the project

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Amco Corp is considering an investment of $100000 in a project that will generate net cash flows of $50000 at the end of the third year, $60000 at the end of the fourth year and $65000 at the end of the fifth year. Assuming a required rate of return of 10% per annum. Answer the following questions.

(a) Calculate the project's net present value of the project. Would you accept or reject the project?

(b) Calculate the payback period of the project. If the manager has a target payback period of 3 years, would you accept or reject the project/

(c)Is your conclusion the same or different for both parts? Explain.

Reference no: EM133275179

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