Calculate the key financial metrics for payback period, net present value, internal rate of return and modified rate of return.
FIN310 Financial Management Principles
Key Financial Data for ABC Company project
Project's discount rate 10%
0 1 2 3
Cash out ($10,000)
Cash in $7,500 $7,500 $7,500
- assume cash flows occur at the beginning of the period
(year 1 cash flow occurs 12 months after the initial investment)
The solution explains how to calculate payback period, net present value, internal rate of return and modified rate of return for the given cash flows.