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A tech company is planning to launch a new product line. The initial investment required is $300,000, and the product line is expected to generate
A tech company is planning to launch a new product line. The initial investment required is $300,000, and the product line is expected to generate annual net cash inflows of $70,000 for 5 years. The firm's required rate of return is 9%. Present value factors are:
Year | PV Factor at 9% |
1 | 0.917 |
2 | 0.842 |
3 | 0.772 |
4 | 0.708 |
5 | 0.650 |
Requirements:
- Calculate the total present value of the cash inflows.
- Determine the NPV.
- Compute the payback period.
- Find the IRR.
- Evaluate the project's financial viability.
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