Question
ABC Ltd. is considering investing in a project that costs $100,000. The project will generate the following cash inflows: Year 1: $20,000 Year 2: $30,000
ABC Ltd. is considering investing in a project that costs $100,000. The project will generate the following cash inflows:
- Year 1: $20,000
- Year 2: $30,000
- Year 3: $40,000
- Year 4: $50,000
- Year 5: $60,000
Requirements: a) Calculate the NPV if the discount rate is 10%. b) Calculate the IRR. c) Calculate the payback period. d) Should ABC Ltd. invest in the project based on NPV and IRR?
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Managerial Accounting
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips
3rd edition
77826485, 978-0077722074, 77722078, 978-0077826482
