A firm evaluates a project with the following cash flows. The firm has a 2 year payback period criteria and a required return of 12 percent. Year Cash flow (OMR) year 0: -26,000, year 1: 18,000, year 2: 10,000, year 3: 7,000, year 4: -15,000, year 5: 9,000. 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?
A firm evaluates a project with the following cash flows. The firm has a 2 year payback period criteria and a required return of 12 percent. Year Cash flow (OMR) year 0: -26,000, year 1: 18,000, year 2: 10,000, year 3: 7,000, year 4: -15,000, year 5: 9,000. 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?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 22E
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A firm evaluates a project with the following cash flows. The firm has a 2 year payback period criteria and a required return of 12 percent.
Year Cash flow (OMR) year 0: -26,000, year 1: 18,000, year 2: 10,000, year 3: 7,000, year 4: -15,000, year 5: 9,000.
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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