Question
XYZ Co. is considering a major expansion of its product line and has estimated the following cash flows associated with such an expansion. The initial
XYZ Co. is considering a major expansion of its product line and has estimated the following cash flows associated with such an expansion. The initial investment would be $2,500,000 and the project would generate incremental cash flows of $750,000 per year for six years.
The cost of capital is 11%.
1. Calculate the NPV
2. Calculate the PI
3. Calculate the IRR
4. Should this project be accepted?
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Years Cash inflow Disc factor Pv inflow a c1111n dac 0 2500000 10000 25...
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Accounting What the Numbers Mean
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,
9th Edition
978-0-07-76261, 0-07-762611-7, 9780078025297, 978-0073527062
