Please HELP Finance cash flow cost?

Question

Calculate the payback for a project that costs $1,000 and is expected to provide cash inflows of $400 per year for the next three years. If the required payback is 3 years, should the firm accept the project?

Calculate the net present value for a project that costs $1,000 and is expected to provide cash inflows of $400 per year for the next three years if the cost of capital is 10%. Should the firm accept the project?

Calculate the internal rate of return for a project that costs $1,000 and is expected to provide cash inflows of $400 per year for the next three years. The cost of capital is 10%. Should the firm accept the project?

Answer 1

These questions are all examining the difference between cash coming in and cash going out. To get the answers you need to examine the difference between these numbers. Will the money coming in cover the money going out? Remember the cost of capital is in addition to the capital expense itself. You might also want to consult other sources on the web such as http://www.investopedia.com/?viewed=1 to understand these concepts. Good luck!