Question: 5) Using the cash flow projections below: Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Total Cash Flow: (500,000) 100,000 125,000

5) Using the cash flow projections below:

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Total Cash Flow: (500,000) 100,000 125,000 150,000 175,000 300,000

a) what is the IRR?

b) what is the Net Present Value if the WACC is 13%?

c) what is the Payback period?

6) Which of these analytic tools (IRR, NPV, or Payback) tells the CFO the least about this investment decision? Why?

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