Question
ABC Inc. is considering the purchase of a machine that will cost $40,000 upfront and the following net cash flows starting in year 1. Assume
ABC Inc. is considering the purchase of a machine that will cost $40,000 upfront and the following net cash flows starting in year 1. Assume the firms cost of capital is 12%, answer the questions below.
| Year | Net Cash flow |
| 1 | 8,000 |
| 2 | 12,000 |
| 3 | 15,000 |
| 4 | 18,000 |
| 5 | 20,000 |
* What is the projects NPV?
* What is the projects IRR?
* What is the projects MIRR?
* What is the projects Payback?
* What is the projects discount payback?
* What is the projects profitability ratio?
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The Handbook Of Financial Instruments
Authors: Frank J. Fabozzi
1st Edition
0471220922, 978-0471220923
