Response to the following problem:
You are evaluating an investment project, Project XX, with the following cash flows:
|
Period
|
Cash Flow
|
|
0
|
-$200,000
|
|
1
|
65,000
|
|
2
|
65,000
|
|
3
|
65,000
|
|
4
|
65,000
|
| 5 |
65,000 |
Calculate the following:
a. Payback period
b. Discounted payback period, assuming a 10% cost of capital
c. Discounted payback period, assuming a 15% cost of capital
d. Net present value, assuming a 10% cost of capital
e. Net present value, assuming a 15% cost of capital
f. Profitability index, assuming a 10% cost of capital
g. Profitability index, assuming a 15% cost of capital
h. Internal rate of return
i. Modified internal rate of return, assuming reinvestment at 10%
j. Modified internal rate of return, assuming reinvestment at 15%