Question: 6 ) Twitter is considering purchasing a new AI computer to manage its platform. This computer would cost $ 7 4 , 2 5 0
Twitter is considering purchasing a new AI computer to manage its platform. This computer would cost $ and generate cash flows according to the following table over the next years. Its has an IRR of and Twitter has a WACC of
Period Cash Flows
$
$
$
$
$
$
a If you use the reinvestment assumption from the NPV method, what would be the total value of these inflows at the end of the year period?
b If the reinvestment assumption from the IRR method is used, what would be the total value of these inflows at the end of the year period?
c Which assumption is more plausible?
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