Question
The Franchise Corporation is considering an equity investment project with the following future cash flows at a 10% opportunity capital cost. In relation to the
The Franchise Corporation is considering an equity investment project with the following future cash flows at a 10% opportunity capital cost. In relation to the capital budget decision:
Year | Cash Flows |
0 | ($255,000) |
1 | 125,000 |
2 | 140,000 |
3 | -50,000 |
4 | 100,000 |
the project must be accepted since MIRR = 10% and NPV = $5,074.45
the project should not be accepted since MIRR = 10% and NPV =$5074.45
the project should be accepted since IRR = 11% and NPV = $260,074.45
the project should not be accepted since IRR = 11% and NPV = $5,074.45
a decision cannot be made because there is a conflict between the different methods used for project evaluation
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