In: Finance
Risky Business is looking at a project with the following estimated cash flow:
Initial investment at start of project: $10,000,000
Cash flow at end of year one: $1,700,000
Cash flow at end of years two through six: $2,000 each year
Cash flow at end of years seven through nine: $2,040,000 each year
Cash flow at end of year ten: $1,569,231
Risky Business wants to know the payback period, NPV, IRR, MIRR, and PI of this project. The appropriate discount rate for the project is 11%. If the cutoff period is 6 years for major projects, determine whether the management at Risky Business will accept or reject the project under the five different decision models.