Question
DeBarry Corporation makes an investment of $50,000 that yields the following cash flows: Year Cash Flow 1 $10,000 2 10,000 3 16,000 4 18,000 5
DeBarry Corporation makes an investment of $50,000 that yields the following cash flows: Year Cash Flow 1 $10,000 2 10,000 3 16,000 4 18,000 5 20,000 a. What is the present value with a 9 percent discount rate (cost of capital)? Use Appendix B. (Round "PV Factor" to 3 decimal places. Round the final answer to the nearest whole dollar.) Net present value $ 24000 b. What is the IRR? (Interpolate using Appendix B. Round the final answer to 2 decimal places.) IRR 12.76 % c. Would you make the same decision under both parts a and b? multiple choice 2 Yes No
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