Business, 22.05.2020 23:01 chambersjamal05

J&E Enterprisesi s considering and investment which produces no cash flows for the first year. In the second year, the cash inflow is $47,000. This inflow will increase to $198,000 and then $226,000 for the following two years, respectively, before ceasing permanently. The initial investment will cost $318,000. The firm requires a 15.5 percent rate of return and has a required discounted payback period of three years. Should the project be accepted. Why or why not?

Year Cash flow Discounted cash flo Cumulative cash flo

1 $0 $0.00 $0.00
2 $47,000 $35,321.72 $35,231.72
3 $198,000 $128,504.77 $163,736.49
4 $226,000 $126,993.21 $290,729.70

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J&E Enterprisesi s considering and investment which produces no cash flows for the first year. I...