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Consider the following set of semiannual cash flows to be generated by an asset under consideration for investment. The asset will cost $8000 to purchase.
Consider the following set of semiannual cash flows to be generated by an asset under consideration for investment. The asset will cost $8000 to purchase. Assume a required rate of return (WACC) of 9% per year, compounded semiannually. A. Calculate the net present value (NPV) of this set of cash flows. B. Calculate the intemal rate of retum (IRR) of the set of cash flows. Be sure to adjust to annual terms. D. Based on the IRR should the company invest in this asset? Why or why not
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