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NOP Corporation plans to invest $900,000 in a new software development project. The project is expected to generate annual cash inflows of $180,000 for 7
NOP Corporation plans to invest $900,000 in a new software development project. The project is expected to generate annual cash inflows of $180,000 for 7 years. The company's discount rate is 12%. The present value factors are:
Year | PV Factor at 12% |
1 | 0.893 |
2 | 0.797 |
3 | 0.712 |
4 | 0.636 |
5 | 0.567 |
6 | 0.507 |
7 | 0.452 |
Requirements:
- Compute the total present value of the cash inflows.
- Calculate the NPV.
- Determine the payback period.
- Calculate the IRR.
- Discuss the project's financial feasibility.
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