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Able Corporation has a project with the following cash flows and a 5.8% cost of money: Numbers in parentheses are outflows. Both Year 0 and

Able Corporation has a project with the following cash flows and a 5.8% cost of money: Numbers in parentheses are outflows. Both Year 0 and Year 3 cash flows are outflows.

Year

0

1

2

3

4

5

6

Cash flow

$(351,000)

$ 95,000

$168,000

$(300,000)

$ 280,000

$280,000

$268,000



  1. Calculate the net present value ______________


  1. Calculate the profitability indexes _________________


  1. Calculate the modified profitability index using the terminal value approach_______________________


  1. Calculate the internal rate of return _____________________________


  1. Calculate the modified internal rate of return ________________________


  1. Calculate the payback period ________________________


  1. Calculate the present value payback period ______________________

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The net present value Year Cash Flows PVF58 PVF 0 351000 1 350000 1 95000 1058 89792 2 168000 ... blur-text-image

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