Reference no: EM132705418

Risky Business is looking at a project with the estimated cash flow as? follows:

Initial investment at start of? project: ?$14,000,000

Cash flow at end of year? one: ?$2,380,000

Cash flow at end of years two through? six: $2,800,000 each year

Cash flow at end of years seven through? nine: ?$2,856,000 each year

Cash flow at end of year? ten: ?$2,040,000

Risky Business wants to know the payback? period, NPV,? IRR, and PI of this project. The appropriate discount rate for the project is 8?%. If the cutoff period is six years for major? projects, determine whether the management at Risky Business will accept or reject the project under the five different decision models.

1. What is the payback period for the new project at Risky? Business? (Round to nearest cents)
2. What is the NPV for the project at Risky? Business? Under the NPV? rule, this project would be accepted or rejected? (round two decimal places)
3. What is the IRR for the new project at Risky? Business? Under the IRR? rule, this project would be accepted or rejected? (Round two decimal places)
4. What is the PI for the new project at Risky? Business? Under the PI? rule, this project would be accepted or rejected? (Round two decimal places)