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What is the payback period for project

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Mariam is analyzing a project and has gathered the following data.

The firm depreciates its assets using straight-line depreciation to a zero book value over the life of the asset. Required rate of return on this project is 10%.

Year Cash Flow Net Income

0 -$642,000 n/a
1 $170,000 $9,500
2 $240,000 $79,500
3 $270,000 $85,500
4 $300,000 $150,000

a) What is the payback period for this project?

b) What is the discounted payback period?

c) What is the project's average accounting rate of return (AAR)?

d) What is the NPV for this project?

e) What is the profitability index for this project?

Reference no: EM132842737

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