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ABC Ltd is considering an investment project with the following cash flow forecasts (in millions): Year o 1 2 3 4 Projected CF -$1,000 $4,172

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ABC Ltd is considering an investment project with the following cash flow forecasts (in millions): Year o 1 2 3 4 Projected CF -$1,000 $4,172 $5,380 $3,478 -$9,768 ABC's discount rate is 7% per year. a) Should ABC Ltd accept this project? (2 marks) b) What will be a problem of using IRR to make the decision in this case? (2 marks) c) When will the NPV and IRR method lead to identical capital budgeting decisions? (2 marks)

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