Firm is considering investing in project with cash flows

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Suppose your firm is considering investing in a project with the cash flows as follows; that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistic for the project are three and three and a half years, respectively.

TIME CASH FLOWS

0 -100,000

1 30,000

2 45,000

3 55,000

4 30,000

5 10,000

- Calculate the NPV and use the NPV technique to evaluate this project; should it be accepted or rejected and why?

Reference no: EM131986776

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