C&P Trading Inc. is considering a project, initial investment is $260,000. The company board of...
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C&P Trading Inc. is considering a project, initial investment is $260,000. The company board of directors set the maximum requirements of return of pay back 3 years and has set the cost of capital is 10%, below is the cash flow: CF1= $75,800 , CF2= $78,960 , CF3= $82,278, CF4= $117,612. (15')
Would you accept the project based on NPV, IRR? (4')
Would you accept the project based on Payback rule if project cut-off period is 3 years? (3')
How would you explain to your CEO what NPV means? (4')
What are advantages and disadvantages of using only Payback method? (4')
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