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A company is considering a project with an initial outlay of $15,000 and expects to generate cash inflows of $4,000 annually for the next 5
A company is considering a project with an initial outlay of $15,000 and expects to generate cash inflows of $4,000 annually for the next 5 years. The company's cost of capital is 14%.
- Compute the Net Present Value (NPV) of the project.
- Calculate the Internal Rate of Return (IRR).
- Determine the payback period.
- Compute the accounting rate of return (ARR) if the average investment is $7,500.
- Based on these calculations, should the project be accepted?
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
15th edition
1337671002, 978-1337395250
