Question
1. Firm H is considering an investment which requires an initial investment of $ 200,000. In Year 1, the investment will realize a $ 50,000
1. Firm H is considering an investment which requires an initial investment of $ 200,000. In Year 1, the investment will realize a $ 50,000 net cash inflow. In Year 2, the investment will generate a $ 50,000 net cash outflow. In each of years 3 and 4, the investment will generate a $ 200,000 net cash flow. The project also will generate a $ 10,000 Salvage Value. Other similar projects generate a 10%
a. What is the Net Present Value of the project ?
b. What do we know about the project's IRR ?
c. What is the project's Payback..... ?
d. Should the investment be pursued ? Why or why not ?
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