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QUESTION 2 (12) A machine costing $1,500,000 is expected to yield the following net cash flows: o Year 1: $600,000 o Year 2: $800,000 o

QUESTION 2 (12) A machine costing $1,500,000 is expected to yield the following net cash flows: o Year 1: $600,000 o Year 2: $800,000 o Year 3: $120,000 o Year 4: $240,000 o Year 5: $600,000 The opportunity cost of capital has been fixed at 12%. Determine and explain whether this investment should be made or not. QUESTION 3 (3) Use the information given in Question 2 and calculate the Internal Rate of Return of this project.

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