Project S has a cost of $65,000, and its expected net cash inflows are $15,000 per year for 8 years. a) What is the project's payback period (to the closest year)? b) The cost of capital is 14%. What is the project's NPV? c) What is the project's IRR? Show all work for credit.

Project S has a cost of $65,000, and its expected net cash inflows are $15,000 per year for 8 years. a) What is the project's payback period (to the closest year)? b) The cost of capital is 14%. What is the project's NPV? c) What is the project's IRR? Show all work for credit.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 1P: A project has an initial cost of 40,000, expected net cash inflows of 9,000 per year for 7 years,...

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Question

Project S has a cost of $65,000, and its expected net cash inflows are $15,000 per year
for 8 years.
a) What is the project's payback period (to the closest year)?
b) The cost of capital is 14%. What is the project's NPV?
c) What is the project's IRR?
Show all work for credit.

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