Question

a. The initial cost of a project is $1 million. The project will run for 5 years. The required rate of return for the project is 11%. The project will have the following cash flows from year 1 to year 5. Yearl: -200,000, Year 2: -100,000, Year 3: 400,000; Year 4: 300.000: Year 5 400,000 What is the Profitability Index of this project? (Points: 3) show your work b. The initial investment of a project is $600,000. The net cash flow in year 1 is $200,000. After that the cash flows will grow at a rate of 10% every year until the end of project's life The project will end at the end of year 5. What is the simple pay back of this project? (Points: 3) show your work

Answer 1

当ㄙ value -18 0200 - 8 1200 2 92,400 91,700 231 200 -200000 3. 02,000 0.659 0.593 300,ooo s. 000, o00 ως 46590 0 - - out la 4 60o,000 nt al C ½aAL 200000(.rn) | [Net Note :-从 2000 O a 3 242poo 26 620o 292 82o yLau 4 lo/.
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