Question

A certain project has the following stream of cash flows:
Year Cash Flow
0.............. $ 17,500
1.............. −80,500
2.............. 138,425
3.............. −105,455
4.............. 30,030
a. Fill in the following table:
Cost of Capital (%) ....... Project NPV
0............. ______
5............. ______
10............. ______
15............. ______
20............. ______
25............. ______
30............. ______
35............. ______
50............. ______
b. Use the values developed in part a to draw a NPV profile for the project.
c. What is this project’s IRR?
d. Describe the conditions under which the firm should accept this project.


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  • CreatedMarch 26, 2015
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