Consider a project with initial investment of Birr 25,000 generating the following cash flows over 4 years. Year Project cash flow (Birr) 0 (25,000) 1 5,000 2 7,000 3 13,000 4 16,000 ii.1 Based on the above details compute the following: Payback period Return on Investment (ROI) Net Present Value (NPV) at 15% discount factor
Consider a project with initial investment of Birr 25,000 generating the following cash flows over 4 years. Year Project cash flow (Birr) 0 (25,000) 1 5,000 2 7,000 3 13,000 4 16,000 ii.1 Based on the above details compute the following: Payback period Return on Investment (ROI) Net Present Value (NPV) at 15% discount factor
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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- Consider a project with initial investment of Birr 25,000 generating the following cash flows over 4 years.
Year |
Project cash flow (Birr)
|
0 |
(25,000) |
1 |
5,000 |
2 |
7,000 |
3 |
13,000 |
4 |
16,000 |
ii.1 Based on the above details compute the following:
- Payback period
Return on Investment (ROI)Net Present Value (NPV) at 15% discount factor- Internal Rate of Investment (
IRR ) - Profitability Index (PI)
ii.2 Do you accept this project for investment? Give reason for your answer.
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