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HELP!! Year (t). Cash Inflows (CF) 1 ------------------. $40,000 2 -----------------. $35,000 3 -----------------. $30,000 4 ----------------. $20,000 5 ----------------. $25,000 Payback, NPV, and IRR
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Year (t). Cash Inflows (CF)
1 ------------------. $40,000
2 -----------------. $35,000
3 -----------------. $30,000
4 ----------------. $20,000
5 ----------------. $25,000
Payback, NPV, and IRR Rieger international is attempting to evaluate the feasibility of investing 895,000 in a piece of equipment that has a 5-year life. The firm has estimated the cash inflows associated with the proposal as shown in the following table: B The firm has a 9% cost of capital. a. Calculate the payback period for the proposed investment b. Calculate the net present value (NPV) for the proposed investment c. Calculate the internal rate of return (IRR), rounded to the nearest whole percent, for the proposed investment d. Evaluate the acceptability of the proposed investment using NPV and IRR. What recommendation would you make relative to implementation of the project? a. The payback period of the proposed investment is 2.67 years. (Round to two decimal places) b. The NPV of the proposed investment is $ (Round to the nearest cent.)Step by Step Solution
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