You evaluate ALL of its projects by applying the Payback, Discounted Payback, NPV, and IRR rules....

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

Solutions

Expert Solution

jeff jeffy answered 1 year ago

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