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1) You have been asked to evaluate a project. An investment of $10,000,000 today will generate cash flows of $800,000/year in perpetuity. a. What is

1) You have been asked to evaluate a project. An investment of $10,000,000 today will generate cash flows of $800,000/year in perpetuity.

a. What is the payback period for this investment?

b. What is the IRR for this investment?

c. If the discount rate is 10%, does the IRR rule suggest you should accept or reject this project?

d. What is the NPV of this investment?

e. Should you undertake this investment?

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