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Graphic Publishing is considering a new graphic and design facility that will involve a large initial outlay and expected the following net cash flows. Year
Graphic Publishing is considering a new graphic and design facility that will involve a large initial outlay and expected the following net cash flows. Year 1 2 3 Project Cash Inflows $500,000 $500,000 $500,000 $500,000 $500,000 $500.000 4 5 6 The project has a conventional payback period of 3.41 years, calculate the project's internal rate of return? Legacy Manufacturing has a 10% cost of capital, and has generated the following information on two mutually exclusive projects: Year 0 1 2 3 4 Project A -$120,000 $50,000 $50,000 $50,000 $50,000 Project B -$100,000 $40,000 $40,000 $40,000 $40,000 a. Compute the net present value (NPV) for project A. b. Compute the net present value (NPV) for project B. c. Which project should Legacy adopt? Why
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