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2 . ( 2 0 points ) ETP Co . has an investment opportunity costing ( initial investment ) ( $ 1 2 0 ,
points ETP Co has an investment opportunity costing initial investment$ that is expected to yield the following cash flows over the next ten years: a negative number means a cash outflow Year : $ Year : $ Year : $ Year : $ Disinvestment payment at Year : $ This is a negative number a Find the NPV of the investment at a discount rate of b Does this capital project appear to be a favorable investment based on NPV Why or Why Not? c What is the profitability Index of this project d If a second project X with an initial investment of $ which has a profitability index of was also being considered, which project ETP or X would be best and why?
points ETP Co has an investment opportunity costing initial investment$ that is expected to yield the following cash flows over the next ten years: a negative number means a cash outflow
Year : $
Year : $
Year : $
Year : $
Disinvestment payment at Year : $ This is a negative number
a Find the NPV of the investment at a discount rate of
b Does this capital project appear to be a favorable investment based on NPV Why or Why Not?
c What is the profitability Index of this project
d If a second project X with an initial investment of $ which has a profitability index of was also being considered, which project ETP or X would be best and why?
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