Тестовое задание
A project has average estimated cash flows of $3,000 per year with an initial investment of $9,000. Depreciation is straight-line with no residual value and the project has a five-year life span. The company has set a Required Rate of Return (RRR) equal to 15% and a target payback period of 2.5 years. Under which investment appraisal method(s), using the company's targets, will the project be accepted? 1. RRR 2. Payback basis
Let's calculate the Net Present Value of the project using RRR as a discount rate:
NPV = -9000 + \frac{3000}{1.15} + \frac{3000}{(1.15)^2} + \frac{3000}{(1.15)^3} + \frac{3000}{(1.15)^4} + \frac{3000}{(1.15)^5} \approx 1056
NPV is positive, so, the project will be accepted based on this criterion. Payback period is Cost of Investment / Annual Cash Flow = $9,000 / $3,000 = 3 years. It is longer than the target period, so the project will not be accepted based on this criterion.