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Suppose your firm is considering investing in a project with the cash flows shown below: Time 0 1 2 3 4 5 6 Cash Flow
Suppose your firm is considering investing in a project with the cash flows shown below: Time 0 1 2 3 4 5 6 Cash Flow -$7,000 $1,500 $1,500 $2,000 $1,500 $1,200 $1,300 Assume the max payback period is 4 years and the cost of capital is 9 percent a. Calculate payback period statistic. Should the project be accepted or rejected? b. Calculate the IRR statistic. Should the project be accepted or rejected? c. Calculate the NPV statistic. Should the project be accepted or rejected?
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