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    S Lu
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    An investment of $160,000 was made with a cost of capital of 12%. Over 10 years, cash flows were projected with positive amounts in years 1-5 to pay down the initial investment, break even in year 6, and profits in years 7-10. The internal rate of return was 15%, net present value was $21,306, average rate of return was -20.75%, and payback period was 5.375 years.

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    An investment of $160,000 was made with a cost of capital of 12%. Over 10 years, cash flows were projected with positive amounts in years 1-5 to pay down the initial investment, break even in year 6, and profits in years 7-10. The internal rate of return was 15%, net present value was $21,306, average rate of return was -20.75%, and payback period was 5.375 years.

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    5 views1 page

    Untitled

    Uploaded by

    S Lu
    An investment of $160,000 was made with a cost of capital of 12%. Over 10 years, cash flows were projected with positive amounts in years 1-5 to pay down the initial investment, break even in year 6, and profits in years 7-10. The internal rate of return was 15%, net present value was $21,306, average rate of return was -20.75%, and payback period was 5.375 years.

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    of 1

    Investment amt 160000

    cost of capital 12%

    year amt
    0 -160000
    1 28000 -132000
    2 28000 -104000
    3 28000 -76000
    4 28000 -48000
    5 28000 -20000
    6 32000 12000 0.375
    7 60000
    8 40000
    9 40000
    10 20000

    IRR 15%
    NPV 21306
    ARR -20.75%
    Payback period 5.375

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