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What is the payback period for this project

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Reference no: EM132915664

Question - 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

$79500

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 projects 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: EM132915664

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