Question
A company is considering an investment project with the following cash flows: Year 1: -$50,000 (initial investment) Year 2: $20,000 Year 3: $25,000 Year 4:
- A company is considering an investment project with the following cash flows:
- Year 1: -$50,000 (initial investment)
- Year 2: $20,000
- Year 3: $25,000
- Year 4: $30,000
Calculate the payback period and the discounted payback period for the project, and determine which measure is more appropriate for this investment decision.
- A company wants to determine the modified internal rate of return (MIRR) for a project with the following cash flows:
- Year 1: -$100,000 (initial investment)
- Year 2: $35,000
- Year 3: $45,000
- Year 4: $55,000
The company has a cost of capital of 10% and wants to use a reinvestment rate of 12% for any positive cash flows.
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Fundamentals Of Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan, Gordon Roberts, J. Ari Pandes, Thomas Holloway
10th Canadian Edition
1259654753, 9781259654756
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