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Blue Spruce Company is considering investing in a project that will cost $150,100 and have no salvage value at the end of its 5 -year
Blue Spruce Company is considering investing in a project that will cost $150,100 and have no salvage value at the end of its 5 -year life. It is estimated that the project will generate annual cash flows of $40,600 each year. The company requires a 9% rate of return and uses the following compound interest table: Click here to view PV tables. (a) Your answer has been saved. See score details after the due date. Compute the net present value and the profitability index of the project. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round profitability index to 2 decimal places, e.g. 15.25 and net present value to 0 decimal places, e.g. 5,275.) Net present value $ Profitability index Compute the internal rate of return on this project. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to 0 decimal places, e.g. 11\%.) Internal rate of return %
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