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Your boss has instructed you to evaluate a new project the firm has been considering moving forward with. Other analysts in the firm have identified
Your boss has instructed you to evaluate a new project the firm has been considering moving forward with. Other analysts in the firm have identified projected cash flows for the project, which are shown below. The firm's WACC is 9.7%. Given the additional risk of this project, your boss has asked you to add 0.5% to the discount rate for this project. Identify the project's Net Present Value, Internal Rate of Return, and Discounted Payback Period (with fractional years calculated). |
Year | 0 | 1 | 2 | 3 | 4 | 5 |
Cash Flow | -27,500 | -3,000 | $8,000 | $11,800 | $14,500 | $10,000 |
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