FIN 3716 Quiz #5
Use the following information to answer questions 1 through 4.
You are analyzing a proposed project and have compiled the following information:
Year
Cash flow
0
$228,000
Required payback period
3 years
1
$
56,500
Required return
9 percent
2
$
99,700
3
$115,000
1.
What is the net present value of the proposed project?
a. $3,448.54
b. $3,163.80
c. $6,163.80
d. $15,377.15
2.
What is the discounted payback period?
3.
Should the project be accepted based on the internal rate of return (IRR)? Why or why not?
4.
Should the proposed project be accepted based on the payback period? Why or why not?
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 Fall '10
 FANG
 Finance, Net Present Value, PAYBACK PERIOD, Internal rate of return, $3,163.80, $6,163.80, $ 56,500

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