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QUESTION 4 (30 Points): TMAN Investment Company is considering a tourism project that will provide the following cash flow over a period of 5 years.
QUESTION 4 (30 Points): TMAN Investment Company is considering a tourism project that will provide the following cash flow over a period of 5 years. Year 0 1 2 3 4 5 Cash-flow $(350,000) $250,000 $75,000 $75,000 $100,000 $50,000 a. Assume that the company uses a %10 discount rate to evaluate its projects. Calculate the Net Present Value (NPV) for the project. Explain whether you would accept or reject the project according to NPV Rule and why? b. Calculate the Profitability Index (PI) for the project. Explain if you would accept or reject the project according to PI Rule and why? C. Assume that the company estimated the cut-off year as 4 years. Calculate the Pay-Back Period for the project. Explain if you would accept or reject the project according to Pay-Back Period Rule and why
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