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Year 0 Period Year 1 Period Year Period Year 3 Period Year n3 n6 - $400 NI= + $200 NI= + $250 NI=+ $300 NI=

Year 0 Period Year 1 Period Year Period Year 3 Period Year n3 n6 - $400 NI= + $200 NI= + $250 NI=+ $300 NI= - $50 NI= + $100 NI= + $100 r = 11% r = 11% r = 11% r = 11% r = 11% r = 11% Period Year Period Assume a 6-year project with the estimated yearly net incomes shown on the diagram. If the investor takes the discount rate "r" in the market is 11% and the payback period cutoff is 3 years. Then, evaluate whether you should accept or reject the project by calculating the net present value (NPV), the discounted payback period, the internal rate of return (IRR), and the profitability index (PI). Year 6

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