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The company is starting a new project. The initial cost of the project ( CF0 ) is 10% of the most recent years capital expenditure
The company is starting a new project. The initial cost of the project (CF0 ) is 10% of the most recent years capital expenditure of 69 million. With this new project, the company is going to receive a cash flow of 1% of the most recent years (3491 million) revenue for each of the next five years (CF1,, CF5 ). The discount rate (WACC) is 5.6%
- Calculate the Net Present Value, Payback Period, and Internal Rate of Return of this project.
- Interpret the values you calculated. Should the company proceed with the project or not?
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