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Calculate the project payback period

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Reference no: EM132787416

Question - Jordan Stove Company is considering a new product line to supplement its range line. The relevant cash flows for project are shown in the following table. The firms' cost of capital is 14%.

Initial Investment (CF0) $404,424

Years (t)

Cash Inflows (CFt)

1

86890

2

106474

3

91612

4

84801

5

84801

6

75400

7

66000

8

92400

REQUIRED -

a. Calculate the project's payback period?

b. Calculate the net present value (NPV) for the project.

c. Calculate the internal rate of return (IRR) for the project.

Summarize the preferences dictated by each measure you calculate and indicate whether you will recommend the project?

Reference no: EM132787416

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