What is the profitability index of the project

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Reference no: EM131990209

A project has a cost of $60,000, and annual cash flows as shown.

Year: 0 1 2 3 4

Cash flow -$25,000 $8,500 $12,000 $13,500 $15,000

1) Assuming a required return of 10%, what is the NPV of the project? Should you accept it?

2) Assuming a required return of 10%, what is the IRR of the project? Should you accept it?

3) What is the payback period of the project? If the required payback period is 3 years, should you accept it?

4) Assuming a required return of 10%, what is the discounted payback period of the project? If the required payback period is 3 years, should you accept it?

5) Assuming a required return of 10%, what is the profitability index of the project? Should you accept it?

Reference no: EM131990209

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