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1) Modern Federal Bank is setting up a brand new branch. The cost of the project will be $1.2 million. The branch will create additional
1) Modern Federal Bank is setting up a brand new branch. The cost of the project will be $1.2 million. The branch will create additional cash flows of $235,000, $412,300, $665,000 and $875,000 over the next four years. The firm's cost of capital is 6 percent. What is the internal rate of return on this branch expansion? (Round to the nearest percent.)
a) 3%
b) none of these
c) 6%
d) 5%
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