Draw a time line to show the cash flows of the project

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A firm is planning a new project that is projected to yield cash inflows of $395,000 in Year 1, $286,000 per year in Years 2 through 5, and $278,000 in Years 6 through 11. This investment will cost the company $1,980,000 today (initial outlay). We assume that the firm's cost of capital is 10%.

(1) Draw a time line to show the cash flows of the project.

(2) Compute the project's payback period, net present value (NPV), profitability index (PI), internal rate of return (IRR), and modified internal rate of return (MIRR).

(3) Discuss whether the project should be taken.

Reference no: EM131736199

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