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Your firm has a cost of capital of 10%. A machine you want to buy is worth $5,000 and will generate net year-end net cashflow
Your firm has a cost of capital of 10%. A machine you want to buy is worth $5,000 and will generate net year-end net cashflow of $1,200, $1,800, $2,500, and then an estimated salvage value at the end of the 3rd year of $700. What is the IRR of the project and is it acceptable, why?
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