Use the following information to answer questions 11-15: A firm evaluates a project with the following cash flows. The firm has a 2 year payback period criteria and a required return of 11 percent. Year Cash flow (OMR) 0 -24,000 1 17,000 2 12,000 3 9,000 4 -8,000 5 11,000 11. What is the net present value for the project? 12. What is the payback period for the project? 13. What is the discounted payback period for the project? 14. What is the profitability index for the project? 15. Given your analysis, should the firm accept or reject the project?
Use the following information to answer questions 11-15: A firm evaluates a project with the following cash flows. The firm has a 2 year payback period criteria and a required return of 11 percent. Year Cash flow (OMR) 0 -24,000 1 17,000 2 12,000 3 9,000 4 -8,000 5 11,000 11. What is the net present value for the project? 12. What is the payback period for the project? 13. What is the discounted payback period for the project? 14. What is the profitability index for the project? 15. Given your analysis, should the firm accept or reject the project?
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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Use the following information to answer questions 11-15:
A firm evaluates a project with the following cash flows. The firm has a 2 year payback period
criteria and a required return of 11 percent.
| Year | Cash flow (OMR) |
| 0 | -24,000 |
| 1 | 17,000 |
| 2 | 12,000 |
| 3 | 9,000 |
| 4 | -8,000 |
| 5 | 11,000 |
11. What is the
12. What is the payback period for the project?
13. What is the discounted payback period for the project?
14. What is the profitability index for the project?
15. Given your analysis, should the firm accept or reject the project?
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