Question
Agape Mining Inc. is evaluating a project with the following cash flows: Year 0 Cashflow -$380,000,000.00 1 $79,000,000.00 2 $82,000,000.00 3456 -$53,000,000.00 $175,000,000.00 $195,000,000.00
Agape Mining Inc. is evaluating a project with the following cash flows: Year 0 Cashflow -$380,000,000.00 1 $79,000,000.00 2 $82,000,000.00 3456 -$53,000,000.00 $175,000,000.00 $195,000,000.00 -$40,000,000.00 7 $188,000,000.00 00 8 $71,000,000.00 Construct a spreadsheet and calculate the following (the required rate of return is 11%): o Payback period o Discounted payback period o Internal rate of return (IRR) o Modified IRR " The discounting approach The reinvestment approach The combination approach Net present value (NPV) Based on your analysis, should the company take the project? Why?
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Fundamentals of Corporate Finance
Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan
8th Edition
978-0073530628, 978-0077861629
