Question
Company ABC is considering investing in a new project. The project requires an initial investment of $200,000 and is expected to generate the following cash
Company ABC is considering investing in a new project. The project requires an initial investment of $200,000 and is expected to generate the following cash flows over the next five years: Year 1: $50,000, Year 2: $70,000, Year 3: $80,000, Year 4: $90,000, Year 5: $100,000. The company's cost of capital is 10%. Evaluate the investment project by calculating the following: a) Net Present Value (NPV) b) Internal Rate of Return (IRR) c) Payback Period Analyze the results and provide a recommendation to the company regarding whether to proceed with the investment.
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