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Corporation is considering a project that will require a cost outlay of $30,000 per year for 4 years. The project is estimated to yield revenues
Corporation is considering a project that will require a cost outlay of $30,000 per year for 4 years. The project is estimated to yield revenues of $60,000 in Year 4, $40,000 in Year 5 and $30,000 for each of the following five years.
If the company requires a minimum rate of return of 14% on all new projects.
- Prepare a fully documented timeline of all cash flows (5 marks)
- Calculate the NPV of the project. (10 marks)
- Calculate the ROI of the project. (5 marks)
- Determine the payback period of the project (5 marks)
- Would you go ahead with the project? Why/why not? (5 marks)
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