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A tech company is considering a project that involves a capital expenditure of $850,000. The project is expected to generate the following cash inflows: Year
A tech company is considering a project that involves a capital expenditure of $850,000. The project is expected to generate the following cash inflows:
- Year 1: $200,000
- Year 2: $250,000
- Year 3: $300,000
- Year 4: $350,000
- Year 5: $400,000
Requirements:
- Calculate the payback period.
- Compute the NPV using a discount rate of 11%.
- Compute the IRR.
- Determine the project's profitability index.
- Decide whether the project should be undertaken.
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