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Your firm has an opportunity to make an investment of $50,000. Its cost of capital is 12 percent. It expects after-tax flows (including the tax
- Your firm has an opportunity to make an investment of $50,000. Its cost of capital is 12 percent. It expects after-tax flows (including the tax shield from depreciation) for the next 5 years to follows:
| Year 1 | $10,000 |
|---|---|
| Year 2 | $20,000 |
| Year 3 | $30,000 |
| Year 4 | $20,000 |
| Year 5 | $5,000 |
- Calculate the NPV
- Calculate the IRR (to the nearest percent)
- Would you accept this project.
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Managerial Economics Foundations of Business Analysis and Strategy
Authors: Christopher Thomas, S. Charles Maurice
12th edition
1260004759, 9781260004755, 78021715, 78021718, 78021901, 978-0078021909
