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Question 4, (Capital Budgets) 20 Marks Given the following cash-flow information on Project C, answer the questions below. He: Year Project 0-$10,000 Initial investment 1

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Question 4, (Capital Budgets) 20 Marks Given the following cash-flow information on Project C, answer the questions below. He: Year Project 0-$10,000 Initial investment 1 $3,500 2 $3,500 3 $3,500 4 $3,500 Assuming an interest rate (discount rate) of 10% calculate the following: a) Calculate the net present value (NPV) of the project b) List the steps involved in calculating and interpreting the NPV's c) Calculate the internal rate of return of the project I d) If the required rate of return is 10%, should the project be accepted or rejected? e) Calculate the pay back period

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