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A company is considering an investment that requires an initial outlay of $20,000. The expected cash inflows are $5,000 in the first year, $6,000 in
A company is considering an investment that requires an initial outlay of $20,000. The expected cash inflows are $5,000 in the first year, $6,000 in the second year, $7,000 in the third year, and $8,000 in the fourth and fifth years. The company's required rate of return is 9%.
Requirements:
- Calculate the NPV of the project.
- Determine the IRR.
- Compute the Modified Internal Rate of Return (MIRR).
- Find the Payback Period.
- Decide if the project should be undertaken based on the financial metrics calculated.
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