Question
Ace Inc is considering investing in a project that costs $560,000. The cost of capital is calculated to be 9% and Ace Inc estimate that
Ace Inc is considering investing in a project that costs $560,000. The cost of capital is calculated to be 9% and Ace Inc estimate that the project will generate net cash flows of $80,000 over a 15-year period.
Calculate the values below and explain whether or not an investment should be made.
1) Payback period
2) Net present value
3) Internal rate of return
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Corporate Financial Management
Authors: Glen Arnold
5th edition
978-1292178066, 129217806X, 273758837, 978-0273758839
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