Problem based on project cash flows


Problem: Given the following project cash flows, identify the correct statement(s). The firm's cost of capital is 15%.

Cash Flow

0    -50
1    150
2    75
3    -10

I.  This project will have two IRRs.
II.  The NPV of the project is $180.57.
III. The profitability index of the project is 2.61.
IV. The payback period of the project is 1.33.

a.    I only
b.    II only
c.    II and III only
d.    IV only
e.    I and IV only

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Finance Basics: Problem based on project cash flows
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