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Arch International is evaluating a project in Venezuela. The project will generate the following cash flows: Year Cash Flow 0 -470000 1 165000 2
Arch International is evaluating a project in Venezuela. The project will generate the following cash flows: Year Cash Flow 0 -470000 1 165000 2 190000 3 205000 4 183000 In an attempt to improve its economy, Venezuela's government has declared that all cash flows created by a foreign company are blocked" and must be reinvested with the government for 1 year. The reinvestment rate for these funds is 4.2%. If Arch uses an 11 percent required return on this project, what are the NPV and the IRR of this project? (Note: you have to bring cash back to time zero from the time they are available and with the exact amounts).
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