1. Consider an investment which has the following cash flows:
Year
Cash flow ($)
0
(31,000)
1
10,000
2
20,000
3
10,000
4
10,000
5
5,000
Compute the: (a) payback period; (b) NPV at 14 percent cost of capital; and (c) IRR. Based on (b) and (c), make a decision about the investment. Should it be accepted or not? Why or why not?