2. Project 2: investing $11 million to develop add-ons to existing products a. these add-ons to existing products are expected to generate $1.5 million positive cash flow every year thereafter on both...

2. Project

2: investing $11 million to develop add-ons to existing products

a. these add-ons to existing products are expected to generate $1.5 million positive cash flow every year thereafter on both new and existing products

b. Calculate NPV.

c. What is payback, PI, and IRR? What decisions should be made?

d. If Skyhawk's management decided that they only need to collect their initial investment within 8 years on this project, should they invest?

The rate of return = 8.28%