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12. Mike has just been asked to analyze an investment project to determine if it is acceptable. He notices that the project has cash flows

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12. Mike has just been asked to analyze an investment project to determine if it is acceptable. He notices that the project has cash flows as below. Apart from the initial investment of $1000, this project requires a major maintenance and additional investment in Year 3. Consequently, a net investment of $100 will be put into the project in Year 3. 0 Year 1 Year 2 Year 3 Year 4 -1000 -100 300 400 500 Mike has tried to use NPV and Internal Rate of Return methods to analyze this case. Considering the cash flows in this project, which additional method will you recommend to Mike before he makes the investment decision? A. Discount time value of money B. Modified Internal Rate of Return C. Average Accounting Return D. Profitability index E. Payback

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