A project costs $10,000 and has an annual cash flows of $2,980 for 6 years. What

Question

A project costs $10,000 and has an annual cash flows of $2,980 for 6 years. What is the discounted payback period if the discount rate is 0%? 21%?

A project has the following cash flows: Year 0 ($15,500), Year 1 $6,200, Year 2 $7,500, Year 3 $6,000. What is the NPV at a discount rate of 0%? 9%? 17%? 29%?

A firm evaluates all of its projects by applying the NPV decision rule. A new project under consideration has the following cash flows: Year 0 ($27,500), Year 1 $11,500, Year 2 $14,500, Year 3 $10,500. What is the NPV for the project if the required return is 25%? Should this project be accepted?

Explanation / Answer

Discount pay back period(21%) = 6.35 years

NPV @ 0% = 4200

          @ 9%= 1133.77

    @ 17% = -975.78

for this new project NPV = - 3644. so this projet is not accepted

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