Capital Budgeting
The Recycled Paper Inc. corporation is considering a projectwith the following cash flows.
Year | Cash Flow |
0 | ($75,000) |
1 | $18,500 |
2 | $18,500 |
3 | $18,500 |
4 | $18,500 |
5 | $12,500 |
6 | $12,500 |
7 | $12,500 |
8 | $12,500 |
Refer to the Capital Budgeting narrative. What is the paybackperiod of the proposed project?
A. 1.28 years
B. 2.28 years
C. 3.28 years
D. 4.08 years
Refer to the Capital Budgeting narrative. What is the netpresent value of the proposed project if the discount rate is12.5%?
A. $4,059.4
B. $3,487.5
C. $4,625.3
D. -$3.984.6
Refer to the Capital Budgeting narrative. What is theprofitability index of the proposed project if the discount rate is12.5%?
A. 0.89
B. 1.05
C. 2.03
D. 3.03
Refer to the Capital Budgeting narrative. What is the IRR of theproposed project?
A. 13.57%
B. 18.35%
C. 12.74%
D. 14.20%
