Use the following information to answer questions 11-15:A firm evaluates a project with the following cash flows. The firm has a 2 year payback period criteria and a required return of 11 percent.YearCash flow (OMR)0-24,000117,000212,00039,0004-8,000511,000 11. What is the net present value for the project?12. What is the payback period for the project?13. What is the discounted payback period for the project?14. What is the profitability index for the project?15. Given your analysis, should the firm accept or reject the project?

Therefore, the net present value is OMR 8,893.62.

Answered: Use the following information to answer…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter11: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 7MC: Calculate the project cash flows for each year. Based on these cash flows and the average project...

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Use the following information to answer questions 11-15:
A firm evaluates a project with the following cash flows. The firm has a 2 year payback period
criteria and a required return of 11 percent.

Year	Cash flow (OMR)
0	-24,000
1	17,000
2	12,000
3	9,000
4	-8,000
5	11,000

11. What is the net present value for the project?
12. What is the payback period for the project?
13. What is the discounted payback period for the project?
14. What is the profitability index for the project?
15. Given your analysis, should the firm accept or reject the project?

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