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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:

  1. Calculate the NPV.
  2. Calculate the IRR.
  3. Determine which metric is more reliable.
  4. Assess the project's risk profile based on NPV and IRR.

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