You are the financial analyst for the Glad It’s Finally Over Company. The director of capital budgeting has asked you to analyze a proposed capital investment. The project has a cost of $20,000, and the cost of capital is 10 percent. The project’s expected net cash flows are as follows:
Year Expected Net Cash Flow
0 ($20,000)
1 9,500
2 6,000
3 6,000
4 4,000
What is the project’s discounted payback?
What is the project net present value?
What is the internal rate of return?
What is the project’s modified internal rate of return?
What is the project’s profitability index?