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JS company is considering an investment that requires an outlay of $100,000 today. Cash inflow from the investment are expected to be $10,000 for year

JS company is considering an investment that requires an outlay of $100,000 today. Cash inflow from the investment are expected to be $10,000 for year 1-3, and $30,000 for year 4, 5, 6, 7, and 8. You require a 20% rate of return on this type of investment. Answer the following questions:

  1. First draw the timeline and specify the cash outflow and inflow for each period.
  2. Calculate the net present value.
  3. Calculate the internal rate of return of this investment.
  4. Calculate the payback periods
  5. Shall the investment be undertaken?

Please report the answer in the following multiple choices.

a Discount rate 0.20
year cash flow
0 ??
1 ??
2 ??
3 ??
4 ??
5 ??
6 ??
7 ??
8 ??
b pv of cash flow since yr 1 ??
npv ??
c IRR ??
d payback period ??
e yes or no? ??

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