As the Chief Financial Officer of a management consulting company you are offered the following project that involve an initial capital expenditure followed by subsequent projected yearly cash inflows. Initial expenditure: 160000
Year Cash Flow
1 20000
2 35000
3 60000
Evaluate this project by calculating the followings:
a) Discounted payback period using a 5.4% discount rate and 1.6% discount rate.
b) Net present value using a 5.4% and a 1.6% discount rate
c) Identify the most profitable project
d) Calculate the internal rate of return.