A technology startup evaluates a new investment opportunity: Initial investment $500,000, expected cash flows Year 1 $200,000, Year 2 $300,000, Year 3 $400,000, discount rate 10%.

• Requirements:
  • Apply the money measurement concept to analyze the financial viability of the investment.
  • Calculate the net present value (NPV) and internal rate of return (IRR) of the project.
  • Discuss how the money measurement concept influences investment decisions.
  • Recommend whether to accept or reject the investment opportunity based on financial analysis.
  • Evaluate the risk factors considered under the money measurement concept in investment decision-making.