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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:
- Compute the NPV of the project.
- Calculate the IRR.
- Determine the payback period.
- Assess the discounted payback period.
- Analyze the financial viability of the project.
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