What is the PAYBACK for the project shown above?

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Use the following information to answer the next five questions below:

A capital investment project is estimated to have the following after-tax cash flows:

Year 0 Year 1 Year 2 Year 3 Year4
($38,000) 14,700 $14,700 $16,000 17,000

The company utilizes a 9% discount rate for capital project analysis.

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a.What is the PAYBACK for the project shown above? (Round to 2 decimals)

b.What is the DISCOUNTED PAYBACK for the project shown above? (Round to 2 decimals)

c.For the project shown above, what is the NET PRESENT VALUE? (Round to the whole number)

d.For the project shown above, what is the INTERNAL RATE OF RETURN? (Use your calculator and round to 2 decimals)

e.For the project shown above, what is the PROFITABILITY INDEX? (show 2 decimals)

 

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