ABC Corporation is considering investing in a project that requires an initial investment of $500,000. The project
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ABC Corporation is considering investing in a project that requires an initial investment of $500,000. The project has a life of 5 years and is expected to generate cash inflows of $120,000 per year for the first 3 years, and $100,000 per year for the last 2 years. The salvage value of the project at the end of its life is estimated to be $50,000. The company's cost of capital is 8%. Determine the net present value (NPV) and internal rate of return (IRR) of the investment. Should ABC Corporation invest in the project?
Related Book For
Principles Of Managerial Finance
ISBN: 978-0136119463
13th Edition
Authors: Lawrence J. Gitman, Chad J. Zutter
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