1. What is the payback period for the following set of cash flows?

Year Cash Flow
0 -$ 7,200
1 2,700
2 1,400
3 1,700
4 2,600

2. An investment project has annual cash inflows of $6,000, $7,100, $7,900, and $9,200, and a discount rate of 16 percent.

Required:

What is the discounted payback period for these cash flows if the initial cost is $9,500?

3. What is the IRR of the following set of cash flows?
Year Cash Flow
0 -$10,960
1 5,700
2 5,700
3 4,900

4. What is the internal rate of return on an investment with the following cash flows?

Year Cash Flow
0 -$118,000
1 44,900
2 32,500
3 48,750

5. What is the profitability index for an investment with the following cash flows given a 6 percent required return?

Year Cash Flow
0 -$21,000
1 7,700
2 10,000
3 9,400