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please do it in 10 minutes will be upvote Consider a capital expenditure project to purchase and install new equipment with an initial cash outlay
please do it in 10 minutes will be upvote
Consider a capital expenditure project to purchase and install new equipment with an initial cash outlay of $21,000. The project is expected to generate net after.tax cash flows each year of $3,900 for eight years, and at the end of the project, a one-time after.tax cash flow of $1,500 is expected. The firm has a weighted average cost of capital of 10 percent and requires a 5 -year payback on projects of this type. Determine whether this project should be accepted or rejected using IRR. Reject sine IRR is 9.15 percent and is less than 10 percent Reloct since IRR is 9.75 percent and is less than Opercent Accest since IRR is 10.64 percent and /5 greater than 10 percent Accept since IRR is 10.64 percent and is greater than Opercent Accept since IRR is 9.75 percent and is greater than O percentStep by Step Solution
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