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A company is evaluating a new project with the following cash flows: Year Cash Flow 0 -$20,000 1 $5,000 2 $10,000 3 $15,000 4 $10,000
A company is evaluating a new project with the following cash flows:
Year | Cash Flow |
0 | -$20,000 |
1 | $5,000 |
2 | $10,000 |
3 | $15,000 |
4 | $10,000 |
Requirements:
- Calculate the NPV of the project if the discount rate is 8%.
- Calculate the IRR of the project.
- Determine the payback period.
- Based on the NPV and IRR, should the company undertake the project?
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Managerial Accounting
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips
3rd edition
77826485, 978-0077722074, 77722078, 978-0077826482
