The company should accept the project as the NPV gives a value less high than zero. The implication is that the project’s cash inflows will repay its cash outlay within six years of operation.
REGULAR PAY BACK PERIOD
The project will not have paid back the initial capital outlay. A viable project should take the shortest time period to repay back the initial capital outlay (Röhrich, 2007). In this case, the project will have not paid $106, 000,000 by the end of year three, and so should be rejected.
USING DICOUNTED PAY BACK PERIOD
INTERNAL RATE OF RETURN Continue reading...
IRR is the