Consider an investment that costs $100,000 and has a cash inflow of $25,000 every year for...

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Accounting

Consider an investment that costs $100,000 and has a cashinflow of $25,000 every year for 5 years. The required return is 9%and required payback is 4 years.
• What is the payback period?
• What is the NPV?
• What is the IRR?
• Should we accept the project?
What decision rule should be the primary decisionmethod?
When is the IRR rule unreliable?
•
•

Answer & Explanation Solved by verified expert

3.7 Ratings (395 Votes)

1Payback period Year Cash inflows Cumulative cash flows 0 100000 100000 1 25000 75000 2 25000 50000 3 25000 25000 4 25000 0 5 25000 25000 As per the above table Payback period is 4 years See Answer

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Consider an investment that costs $100,000 and has a cash inflow of $25,000 every year for...

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Verified Solution

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Accounting

Answer & Explanation Solved by verified expert

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