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A company pursues all projects that exceed its 15% cost of capital. Project Affinity is available to the company with an initial investment of $655,000.
A company pursues all projects that exceed its 15% cost of capital. Project "Affinity" is available to the company with an initial investment of $655,000. Forecasted profits are expected to be $200,000 for the first three years and $160,000 for the subsequent three years. Based on the IRR, should the company pursue Project "Affinity"?
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