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1 2 . You are evaluating a short term transaction, acquiring a public company implementing several business enhancements before attempting to exit five years later.

12. You are evaluating a short term transaction, acquiring a public company implementing several business enhancements before attempting to exit five years later. All numbers are in thousands. Initial equity investment would be $900 and the remaining required capital would be borrowed. Free cash flows to equity (after debt service, taxes, capex, etc.) for years 1 through 5 from the business would be $80, $100, $150, $300, and $350, respectively. The cash flow from sale after paying off the debt, realized in year 5 would be $800. Using an equity required rate of return of 14%, calculate the NPV of this investment and the IRR, respectively.
Group of answer choices
a.(477),4.1%
b.228,6.3%
c.(124),-3.5%
d.550,7.5%

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