Requirements Compute the NPV at a discount rate of 10 Determine the IRR Evaluate the projects acceptability based on NPV and IRR Calculate the Payback Period Assess the NPVs sensitivity to a discount rate change to 12 Year Cash Inflows Cash Outflows 0 $0 $7,000 1 $1,800 $0 2 $1,800 $0 3 $1,800 $0 4 $1,800 $0 5 $1,800 $0

Question: Requirements: Compute the NPV at a discount rate of 10%. Determine the IRR. Evaluate the projects acceptability based on NPV and IRR. Calculate the Payback

Requirements:

Compute the NPV at a discount rate of 10%.
Determine the IRR.
Evaluate the project’s acceptability based on NPV and IRR.
Calculate the Payback Period.
Assess the NPV’s sensitivity to a discount rate change to 12%.

Year	Cash Inflows	Cash Outflows
0	$0	$7,000
1	$1,800	$0
2	$1,800	$0
3	$1,800	$0
4	$1,800	$0
5	$1,800	$0

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Solution To address the requirements lets follow the steps one by one 1 Compute the NPV at a discount rate of 10 The formula for NPV is NPV Cash Flow ... View full answer

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