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A company is assessing a new project that requires an initial investment of $120,000 and is expected to generate the following net cash flows: Year

A company is assessing a new project that requires an initial investment of $120,000 and is expected to generate the following net cash flows:

Year

Cash Flows ($)

DF (9%)

1

25,000

0.917

2

30,000

0.842

3

35,000

0.772

4

40,000

0.708

5

50,000

0.650

Salvage Value

20,000

0.650

Requirements:

  1. Compute the NPV of the project.
  2. Calculate the IRR.
  3. Determine the payback period.
  4. Assess the discounted payback period.
  5. Analyze the financial viability of the project.

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