FIN 370 Chapter 11-24 Wk 4 Solution
FIN 370 Chapter 11-24 Wk 4
11–24. (Payback period, net present value, profitability index, and internal rate of return
calculations) You are considering a project with an initial cash outlay of $80,000 and
expected cash flows of $20,000 at the end of each year for six years. The discount rate
for this project is 10%.
a. What are the project’s payback and discounted payback periods?
b. What is the project’s NPV?
c. What is the project’s PI?
Discounted Payback Period Calculations: