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Q2. The company XYZ is deciding whether or not to on a new project with an initial cost of 5.5 MM$. Net cash inflows are
Q2. The company XYZ is deciding whether or not to on a new project with an initial cost of 5.5 MM$. Net cash inflows are expected to be 9 MM$ for each of the first five years of operations. In the sixth year, the abandonment cost of the project is 35 MM$. a. Develop and plot the NPV profile for the project b. Should the project be accepted at a rate of return of 8%? Should it be accepted at a rate of return of 15%? C. What is the project GRR if the available reinvestment rate is 8%? What if the rate is 15%
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