Homework answers / question archive / Along with that Kencan has been presented with an investment opportunity into Europe which will yield cash flows of $34,000 per year starting from 2019, Years 1 through 4, $35,000 per year in Years 5 through 9, and $45,000 in Year 10

Along with that Kencan has been presented with an investment opportunity into Europe which will yield cash flows of $34,000 per year starting from 2019, Years 1 through 4, $35,000 per year in Years 5 through 9, and $45,000 in Year 10

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Along with that Kencan has been presented with an investment opportunity into Europe which will yield cash flows of $34,000 per year starting from 2019, Years 1 through 4, $35,000 per year in Years 5 through 9, and $45,000 in Year 10. This investment will cost the firm $130,000 today, and the firm's cost of capital is 9.5 percent with the assumption that the cash flows occur evenly during the year.

1)Calculate the payback period for Kencan Investment into Europe. (5 marks)

2)Calculate the Net Present Value (NPV) of Kencan Investment into Europe. (5 marks)

3)Calculate the Profitability Index (PI) of Kencan’s Investment into Europe. (2 marks)

4) Calculate the Internal Rate of Return (IRR) of Kencan’s Investment into Europe.