Using a WACC of 15%, apply four capital budgeting techniques to evaluate the project, assuming the...
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Using a WACC of 15%, apply four capital budgeting techniques to evaluate the project, assuming the Free Cash Flows are as follows: Years Free Cash Flows 0 ($252,000.00) 1 $118,625.00 2 $127,125.00 3 $181,000.00 The four techniques are NPV, IRR, MIRR, and discounted Payback. Assume the reinvestment rate to be 8% for the MIRR. Also, assume that the business will only accept projects with a payback period of two and half years or less. Using a WACC of 15%, apply four capital budgeting techniques to evaluate the project, assuming the Free Cash Flows are as follows: Years Free Cash Flows 0 ($252,000.00) 1 $118,625.00 2 $127,125.00 3 $181,000.00 The four techniques are NPV, IRR, MIRR, and discounted Payback. Assume the reinvestment rate to be 8% for the MIRR. Also, assume that the business will only accept projects with a payback period of two and half years or less.
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To evaluate the project using the four capital budgeting techniques we need to calculate the relevant cash flows and discount them using the weighted ... View the full answer
Related Book For
Linear Algebra And Its Applications
ISBN: 9781292351216
6th Global Edition
Authors: David Lay, Steven Lay, Judi McDonald
Posted Date:
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