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3. (13 pts) ABC Inc. is considering a project with the following cash flows. Cash flows in parentheses denote negative cash flows. Year Cash Flow

3. (13 pts) ABC Inc. is considering a project with the following cash flows. Cash flows in parentheses denote negative cash flows.

Year Cash Flow

0 ($200,000)

1 120,000

2 120,000

3 40,000

4 120,000

Discount Rate K is 10 percent.

What is the NPV and IRR?

What is the payback period?

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