Suppose your firm is considering investing in a project with the cash flows shown below, that...

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Finance

Suppose your firm is considering investing in a project with thecash flows shown below, that the required rate of return onprojects of this risk class is 8 percent, and that the maximumallowable payback and discounted payback statistics for the projectare 3.5 and 4.5 years, respectively.
Time:0 1 2 3 4 5 6
Cash flow:–$5,000 $1,200 $2,400 $1,600 $1,600 $1,400 $1,200
Use the NPV decision rule to evaluate this project. (find $ notyears)
Can you give step by step instructions?

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4.3 Ratings (866 Votes)

Evaluation of Investment proposal using NPV Decision Rule Here the Investment Decision can be taken based on the Net Present Value NPV of the Project The Project should be accepted See Answer

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Suppose your firm is considering investing in a project with thecash flows shown below, that the required rate of return onprojects of this risk class is 8 percent, and that the maximumallowable payback and discounted payback statistics for the projectare 3.5 and 4.5 years, respectively.Time:0 1 2 3 4 5 6Cash flow:–$5,000 $1,200 $2,400 $1,600 $1,600 $1,400 $1,200Use the NPV decision rule to evaluate this project. (find $ notyears)Can you give step by step instructions?