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A company is considering an investment with the following cash flows. What is the project's Net Present Value (NPV) and Internal Rate of Return (IRR)
· A company is considering an investment with the following cash flows. What is the project's Net Present Value (NPV) and Internal Rate of Return (IRR) if the discount rate is 9%?
Cash Flows:
- Year 0: -$45,000
- Year 1: $15,000
- Year 2: $20,000
- Year 3: $25,000
- Year 4: $30,000
Requirements:
- Calculate the NPV.
- Calculate the IRR.
- Determine which metric is more reliable.
- Assess the project's risk profile based on NPV and IRR.
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