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Question 1 A company accepts projects with a payback period of 3 years or less. If the company has the following cash flows for a
Question 1
A company accepts projects with a payback period of 3 years or less. If the company has the following cash flows for a project, should it be accepted? Yr 0 = -$65,000; Yr 1 = $25,000; Yr 2 = $29,000; Yr 3 = $22,000; Yr 4 = $9,000. Would your answer change if the initial cost for the project was $80,000?
Question 2
A company has a project opportunity that provides annual cash flows of $17,000 for nine years and costs $80,000 today. If the required return is 7% should the project be accepted? What if the required return is 18%?
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