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Company VWX is analyzing a project with the following information: Initial cost: $250,000 Cash flows: $70,000 annually for 5 years Salvage value: $20,000 Requirements: Compute
Company VWX is analyzing a project with the following information:
- Initial cost: $250,000
- Cash flows: $70,000 annually for 5 years
- Salvage value: $20,000
- Compute the payback period.
- Calculate the NPV at a discount rate of 11%.
- Determine the IRR.
- Discuss the impact of salvage value on the NPV and IRR calculations.
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Corporate Financial Management
Authors: Glen Arnold
5th edition
978-1292178066, 129217806X, 273758837, 978-0273758839
