ABC limited company looking to invest in one of the Project cost that project is $50,000 and cash inflows and outflows of a project for 5 years, as shown in the below table. Calculate Profitability Indexusing a 5% discount rate and estimate Internal Rate of Return of the Project using Discount rates of 8% and 5%. Years Cash Inflows Cash Outflows Initial Investment $ 50,000.00 1 $ 20,000.00 $ 5,000.00 2 $ 14,000.00 $ 2,000.00 3 $ 12,000.00 $ 2,000.00 4 $ 12,000.00 $ 2,000.00 5 $ 15,000.00 $ 1,000.00 Interest Rate 5%
ABC limited company looking to invest in one of the Project cost that project is $50,000 and cash inflows and outflows of a project for 5 years, as shown in the below table. Calculate Profitability Indexusing a 5% discount rate and estimate Internal Rate of Return of the Project using Discount rates of 8% and 5%. Years Cash Inflows Cash Outflows Initial Investment $ 50,000.00 1 $ 20,000.00 $ 5,000.00 2 $ 14,000.00 $ 2,000.00 3 $ 12,000.00 $ 2,000.00 4 $ 12,000.00 $ 2,000.00 5 $ 15,000.00 $ 1,000.00 Interest Rate 5%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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ABC limited company looking to invest in one of the Project cost that project is $50,000 and
| Years | Cash Inflows | |
| Initial Investment | $ 50,000.00 | |
| 1 | $ 20,000.00 | $ 5,000.00 |
| 2 | $ 14,000.00 | $ 2,000.00 |
| 3 | $ 12,000.00 | $ 2,000.00 |
| 4 | $ 12,000.00 | $ 2,000.00 |
| 5 | $ 15,000.00 | $ 1,000.00 |
| Interest Rate | 5% |
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