1 A project has an initial cost of $ 320,000, expected after-tax cash inflows of $...

1 A project has an initial cost of $ 320,000, expected after-tax cash inflows of $ 75,000 per year for 8 years, a net salvage value of $ 30,000, and a cost of capital of 11%.

a) What is the project's net present value?

b) What is the project's profitability index? c) What is the project's internal rate of return?

d) What is the project's modified internal rate of return (assume the investment rate to be equal to the cost of capital)?

e) What is the project's regular payback?

f) What is the project's discounted payback?

g) Should the project be accepted, on a stand-alone basis?

Solutions

Expert Solution

jeff jeffy answered 1 year ago

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