In: Finance
You evaluate ALL of its projects by applying the Payback, Discounted Payback, NPV, and IRR rules.
Assume the cost of capital is 10%.
Assume cash flows of:
TIME
CASH FLOWS
--------------------------------------------------------------
0
-$100
1
+$75
2
+$50
3
+$25
What is the payback?
What is the Discounted Payback?
What is the NPV?
Is the IRR equal to 28.86%?
a. Yes
b. No