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Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 9 percent, and that the maximum allowable payback and discounted payback statistics for the project are 2.0 and 3.0 years, respectively.

Time: 0 1 2 3 4 5 6
Cash flow: $7,600 $1,190 $2,390 $1,590 $1,590 $1,390 $1,190

Use the PI decision rule to evaluate this project.

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively.

Time: 0 1 2 3 4 5 6
Cash flow: $5,000 $1,230 $2,430 $1,630 $1,630 $1,430 $1,230

Use the NPV decision rule to evaluate this project.

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively.

Time: 0 1 2 3 4 5 6
Cash flow: $5,600 $1,800 $3,000 $2,200 $2,200 $2,000 $1,800

Use the MIRR decision rule to evaluate this project.

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 2.0 and 3.0 years, respectively.

Time: 0 1 2 3 4 5 6
Cash flow: $8,600 $1,080 $2,280 $1,480 $1,480 $1,280 $1,080

Use the IRR decision rule to evaluate this project

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