Is this project a worthwhile investment

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Question: 1. Would you put £40,000 into a project which pays back nothing in the first year but then brings annual net returns of £12,000 from the end of year 2 until the end of year 6, assuming an interest rate of 8%?

2. A project requires an initial outlay of £20,000 and will pay back the following returns (in £):

1,000 at the end of years 1 and 2

2,000 at the end of years 3 and 4

5,000 at the end of years 5, 6, 7, 8, 9 and 10

Is this project a worthwhile investment if the going rate of interest is (a) 9%, (b) 10%?

Reference no: EM131482185

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