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2) Latavia Inc. considers an investment project which is expected to generate the following free cash flows in the next 5 years. The relevant discount
2) Latavia Inc. considers an investment project which is expected to generate the following free cash flows in the next 5 years. The relevant discount rate of the project is 20% and the cost of the project is 400 000. The firm evaluates the feasibility of this investment on the basis of the net PV method and the discounted payback method. The CEO of the company demand payback in three years. Given this information a) Is that project feasible according to net PV method? b) Is that project feasible according to discounted payback method if the target payback period is three years? c) If there is a contradiction between the results of these two methods; which ne is the more reliable approach
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