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Suppose you acquired a sub-sandwich restaurant for $100,000. Your required return is 10%. The anticipated cash flows, which are distributed evenly throughout each year, are

Suppose you acquired a sub-sandwich restaurant for $100,000. Your required return is 10%. The anticipated cash flows, which are distributed evenly throughout each year, are as follows: Year 0, -$120,000; Year 1, $60,000; Year 2, $30,000; Year 3, $60,000; and Year 4, $10,000. Which of the following is a true statement? Question 12 options: The payback of this investment is 1.5 years. The profitability index of this investment is 1.094 The net present value of this investment is $16,256. None of the other statements is true. Because of the nonconventional cash flows, the IRR cannot be determined in this case

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