Question: Question 4 ABC Ltd is considering a project with the following cash flows: Initial investment: $300,000 Year 1: $100,000 Year 2: $120,000 Year 3: $140,000

Question 4

ABC Ltd is considering a project with the following cash flows:

  • Initial investment: $300,000
  • Year 1: $100,000
  • Year 2: $120,000
  • Year 3: $140,000
  • Year 4: $160,000
  • Year 5: $180,000

The company’s required rate of return is 15%. Calculate:

  1. Net Present Value (NPV).
  2. Payback Period.
  3. Discounted Payback Period.
  4. Internal Rate of Return (IRR).
  5. Modified Internal Rate of Return (MIRR) assuming the reinvestment rate is 10%.

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