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You have been asked by your CFO to compute the NPV and IRR for an upcoming six - year capital equipment project. She says: the

You have been asked by your CFO to compute the NPV and IRR for an upcoming six-year capital equipment project. She says: the project generates the following cash flows: $50 Million outflow in year zero; $7 Million cash inflow per year in years one through five; $15 Million cash inflow in year six plus the project generates an additional $10 Million cash inflow in year six from the salvage (selling the project equipment for salvage). The CFO tells you: we assume the cash outflow happens at time zero and the cash inflows all happen at the end of each year (example: year one cash flow comes at the end of year one and so forth). The company has a 12% cost of capital. Based on NPV and IRR, would you accept this project? and why?

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