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CASHFLOW PROJECT C0 C1 C2 C3 C4 C5 A -5,000 5,000 0 0 0 0 B -3,000 1,000 1,000 3,000 1,500 1,500 C -2,000 1,000
CASHFLOW | |||||||
PROJECT | C0 | C1 | C2 | C3 | C4 | C5 | |
A | -5,000 | 5,000 | 0 | 0 | 0 | 0 | |
B | -3,000 | 1,000 | 1,000 | 3,000 | 1,500 | 1,500 | |
C | -2,000 | 1,000 | 500 | 0 | 1,200 | 1,200 |
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If the opportunity cost of capital is 10%, compute the projects NPV. Which project(s) should the firm accept?
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Calculate the payback period for each project. Which project(s) would a firm using the payback rule accept if the cut-off period were three years?
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Calculate the internal rate of return (IRR) of project A.
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If we only have 7,000 to invest in, which project(s) should we select and why?
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