A retail chain is planning to launch a new store. The expected cash flows are:Initial...
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Accounting
A retail chain is planning to launch a new store. The expected cash flows are:
- Initial outlay: $3,500,000
- Year 1: $1,000,000
- Year 2: $1,200,000
- Year 3: $1,400,000
- Year 4: $1,600,000
The company's discount rate is 10%.
- Calculate the NPV of the new store.
- Determine the IRR.
- Calculate the Modified Internal Rate of Return (MIRR).
- Should the company go ahead with the project if their minimum acceptable IRR is 12%?
- Compute the discounted payback period.
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