7. Roberts and Company are considering investing in a project to streamline their production process....
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7. Roberts and Company are considering investing in a project to streamline their production process. The cash flows are shown below. The required rate of return for projects of this class is 8%. Time 0 1 2 3 4 5 6 Cash flow -200,000 55,000 65,000 10,000 35,000 25,000 10,000 Use the NPV decision rule to evaluate this project; should it be accepted or rejected? Show your calculations for the NPV.
8. Given the date in question 7 above, Roberts and Company now estimate that the cash flow in year 1 will be 100,000 instead of 55,000. Calculate the IRR. Based on the IRR calculation Should the project be accepted? Show your IRR calculations.
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