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help oblems with the IRR method Acme Oscillators is considering an investment project that has the following rather unusual cash flow pattern Year 0 1
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oblems with the IRR method Acme Oscillators is considering an investment project that has the following rather unusual cash flow pattern Year 0 1 2 3 4 Cash Flow $98 -461 793 -6028 1713 a. Calculate the project's NPV at each of the following discount rates: 0%, 5% 10% 20% 30%, 40%, 50% b. What do the calculations tell you about this project's IRR? The IRR rule tells managers to investir a project's IRR is greater than the cost of capital. If Acme Oscillators' cost of capital is 8%, should the company accept or reject this investment? c. Notice that this project's greatest NPVs come at very high discount ratos. Can you provide an intuitive explanation for that pattern? a. Calculate the NPV at the following discount rates for this investment 0%,5%, 10% 20% 30% 40%,60% The NPV at 0% iss - 1,5000(Round to the nearest cent) The NPV at 5% i $ - 15656 (Round to the nearest cent) The NPV at 10% is (Round to the nearest cont.) Step by Step Solution
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