Compute the project payback period-net present value

Assignment Help Financial Management

Reference no: EM132050882

Capital Budgeting Analysis: The SL Energy Group is planning a new investment project which is expected to yield cash inflows of $285,000 per year in Years 1 through 3, $250,000 per year in Years 4 through 8, and $198,000 in Years 9 through 12. This investment will cost the company $1,000,000 today (initial outlay). We assume that the firm's cost of capital is 7.8%.

1) Draw a time line to show the cash flows of the project.

2) Compute the project’s payback period, net present value (NPV), profitability index (PI), and internal rate of return (IRR).

3) Discuss whether the project should be taken.

Reference no: EM132050882

Questions Cloud

Compute the journal entry to record the dividend on april : Jewel Company received the dividend on April 15. The journal entry to record the dividend on April 15 is

Prevent insolvent trading : Look at question 5 of Problem Set 6. Assume that the directors of JV Investor have breached their duty to prevent insolvent trading.

Write the pseudocode statement for the process : During this course you will design a program for a state university. The university needs a website design that will enable students to order books online.

Public policy reasons for applying : There are public policy reasons for applying - or not applying warranty law in consumer and commercial cases.

Compute the project payback period-net present value : Compute the project’s payback period, net present value (NPV), profitability index (PI), and internal rate of return (IRR).

How the role of diversity plays in the healthcare arena : Can you help please help me understand how the role of diversity plays in the healthcare arena?

What is the breakeven point in units : What is the breakeven point in units, assuming a products selling price is $100, fixed costs are $8000, unit variable costs are $20

Prepare for in regards to ada-eeoc regulations : Are there any areas of concern that a manager should prepare for in regards to ADA/EEOC regulations? Examples of benefits to having a diversity plan set

Desire to bear interest rate risk on this money : A bank will accept delivery of $40,000,000 in one month, but it has no desire to bear interest rate risk on this money during the waiting period.

User Account

All Pages