Question: PQR Co. is considering a project with an initial investment of $6,000 and expected annual cash inflows of $1,800 for five years. Requirements: Calculate the

PQR Co. is considering a project with an initial investment of $6,000 and expected annual cash inflows of $1,800 for five years.

Requirements:

  • Calculate the NPV using a discount rate of 9%.
  • Compute the IRR.
  • Should the project be accepted based on NPV and IRR?
  • Determine the Payback Period.
  • Evaluate the effect on NPV if the discount rate decreases to 7%.

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