Question: Project Analysis DEF Inc. is considering a new project with the following financial projections: Initial Investment : $60,000 Annual Cash Flows : Year 1: $20,000

Project Analysis

DEF Inc. is considering a new project with the following financial projections:

Initial Investment: $60,000 Annual Cash Flows:

  • Year 1: $20,000
  • Year 2: $25,000
  • Year 3: $30,000

Discount rate is 10%.

Requirements:

  1. Calculate the NPV.
  2. Compute the IRR.
  3. Find the payback period.
  4. Conduct a sensitivity analysis with a discount rate of 12%.

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