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ABC Ltd is considering an investment project with the following cash flow forecasts: Year 0 1 2 3 4 5 Net CF ? $15,000 $15,000
ABC Ltd is considering an investment project with the following cash flow forecasts: Year 0 1 2 3 4 5 Net CF ? $15,000 $15,000 $15,000 $15,000 $20,000 The project's IRR is 13.34% per year and its required rate of return (discount rate) is 11% per yea a) What is the initial outlay of this project (net CF at t-0)? (2 marks) b) Shoud ABC Ltd accept the project based on IRR and NPV methods? (4 marks) c) Do NPV and IRR methods lead to identical capital budgeting decisions? Why? (2 marks)
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