The Inventive Co. is considering a new project. This project requires an initial cash investment of $84,000. The project will generate cash inflows of $14,000 in the first year. Then, the project will do nothing for two years, after which time cash inflows of $38,000 will be generated for four years. How long will it take the Inventive Co. to recover its $84,000 investment?
The net present value of a project's cash inflows is $12,933 at a 11.2 percent discount rate. The profitability index is 1.55 and the firm's tax rate is 26 percent. What is the initial cost of the project?