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A project will cost $1.9 million. The company uses a 11% discount rate as a threshold for accepting capital projects. It is expected to have a 5 year life and return the following:

Year 1 $400,000

Year 2 $500,000

Year 3 $650,000

Year 4 $900,000

Year 5 $600,000

a. find out the project's Net Present Value (NPV)

b. find out the Profitability Index

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M942499

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