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Use the following information to answer the questions. You are considering whether to launch a new product and want to determine the financial feasibility.
Use the following information to answer the questions. You are considering whether to launch a new product and want to determine the financial feasibility. If you undertake the project, you will initially need to invest $15 million in up-front capital on the first day to launch the project. From operating the project, the project is expected to generate end-of-first-year net cash flow of $3 million, growing 11.5% annually for the next four years end-of-year net cash flow (i.e., from end- of-years 2 through 5). You will finance the project with a combination of debt and equity and your weighted average cost to finance the initial capital is 7.5%. Question 1. From a financial feasibility perspective only, should the company accept or reject this project? (Worth 3 point) Question 2: From a financial feasibility perspective only, provide the full quantitative detail and full qualitative reasoning to support why the company should accept or reject this project? (Worth 7 points)
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