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XYZ is evaluating a 1-year project that would involve an initial investment in equipment of 561,000 and an expected cash flow of 572.000 in 1

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XYZ is evaluating a 1-year project that would involve an initial investment in equipment of 561,000 and an expected cash flow of 572.000 in 1 year. The project has a cost of capital of 16.55 percent and an internal rate of return of 18.03 percent. If XYZ were to use 561,000 in cash from its bank account to purchase the equipment, the net present value of the project would be 5776. However, XYZ has no cash in its bank account so using money from its account is not possible. Therefore, the firm would need to borrow money to raise the $61.000. if XYZ were to borrow money to raise the 561.000, the interest rate on the loan would be 18.64 percent. XYZ would receive 561.000 from the bank at the start of the project and would pay 572.370 to the bank in 1 year. Which of the following assertions is true? a. if XYZ borrows money to raise 561,000, then the NPV of the project would be equal to or greater than 5777 b. if XYZ borrows money to raise 561.000, then the NPV of the project would be less than or equal to 5775 c. If XYZ borrows money to raise 561.000, then the NPV of the project would be greater than 5775 but less than 5777 if XYZ borrows money to raise 561.000, then it is not clear whether the NPV of the project would be less than or equal to 5775. greater than 5775 but less than 5777, or equal to or greater than 5777

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