Consider the following investment time cash flow 1 1300 2


Consider the following Investment: Time Cash Flow 1 $1300 2 $2400 3 $1100 4 $1200 The investment outlay is $6000. The required return is 10.75%. Required payback period is 18 months.

a. What is the NPV, and IRR, and Payback of this investment?
b. Is this a profitable investment?
c. What are the decision rules you used for NPV and IRR of this investment?
d. What are the assumptions implied by the NPV and IRR?
e. What are the decision rules you used for the payback?

 

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Finance Basics: Consider the following investment time cash flow 1 1300 2
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