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Your firm is considering sponsoring a pavilion at the upcoming World's Fair. The pavilion project's cash flows are as follows: Year Net Cash Flow 0

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Your firm is considering sponsoring a pavilion at the upcoming World's Fair. The pavilion project's cash flows are as follows: Year Net Cash Flow 0 ($7 million) + 10.2 million (2 million) Which of the following statements is most CORRECT? (Hint: Draw an NPV profile.) O A The project has two IRRS (22.364924% and 321.406982%). The project only has one IRR because the sum of cash flows is positive when the cost of capital equals zero and the NPV profile ends up at negative 7 million. C . As the cost of capital approaches infinity, the NPV will approach negative $2 million. U. The project is profitable within the entire relevant range (0% to 30%) of the cost of capital. O . The project should not be accepted if the cost of capital is less than 22.364924 percent. UESTION 5 You invested in a project that has the following quarterly cash flows over the next 1.5 years. If interest is compounded quarterly, what is the effective annual rate of return for this project? (Round to 6 decimal places throughout.)

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