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Question 05: Circe De Solstice is planning to introduce a new show that it plans to run for the next five years. The company believes
Question 05: Circe De Solstice is planning to introduce a new show that it plans to run for the next five years. The company believes that they need to spend $1,000,000 at the beginning to get the show up and running. The expected cash flows from the show in the coming 5 years is as follows - Period Year 1 Year 2 Estimated Cash Flow $(200.000) 100,000 300,000 500,000 800,000 Year 3 Year 4 Year 5 If the required rate of return for the company is 12%, should the show be introduced based on a Modified Rate of Return (MIRR) approach? [4 Marks)
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