A capital investment project requires an investment of £75,000 and has an expected life of four years. Annual cash flows at the end of each year are expected to be as follows: Required:
a.
Compute payback assuming that the cash flows occur evenly throughout the year.
b.
Compute the net present value of the project using a 12 per cent discount rate.

Question

A capital investment project requires an investment of £75,000 and has an expected life of four years. Annual cash flows at the end of each year are expected to be as follows:  Required: 
a.
Compute payback assuming that the cash flows occur evenly throughout the year.
b.
Compute the net present value of the project using a 12 per cent discount rate.

Quizplus · Accepted Answer

The Answer of A capital investment project requires an investment of £75,000 and has an expected life of four years. Annual cash flows at the end of each year are expected to be as follows:  Required: 
a.
Compute payback assuming that the cash flows occur evenly throughout the year.
b.
Compute the net present value of the project using a 12 per cent discount rate.

A Capital Investment Project Requires an Investment of £75,000 and Has