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Company Xero is considering project A. Project A requires an initial investment of $50,000. It generates $25,000 each year for the coming 3 years. What
Company Xero is considering project A. Project A requires an initial investment of $50,000. It generates $25,000 each year for the coming 3 years.
- What is the IRR of the project?
- If the discount rate for this project was found to be 15%. Will company XYZ undertake the project? Why?
- Calculate NPV using the 15% discount rate. Will company XYZ undertake the project? Why?
- Calculate the profitability index and decide on the project.
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The Econometric Modelling Of Financial Time Series
Authors: Terence C. Mills, Raphael N. Markellos
3rd Edition
052171009X, 1107714125, 9780521710091, 9781107714120
