Evaluate the following projects with the given cash flows:YearProject 1Project 2Project 3Initial Outlay-$5,000-$6,000-$7,000Year 1$2,000$2,000$2,000Year 2$2,000$2,000$3,000Year...
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Accounting
Evaluate the following projects with the given cash flows:
Year
Project 1
Project 2
Project 3
Initial Outlay
-$5,000
-$6,000
-$7,000
Year 1
$2,000
$2,000
$2,000
Year 2
$2,000
$2,000
$3,000
Year 3
$2,000
$2,000
$4,000
Required:
Calculate the payback period for each project.
Compute the NPV for each project at a discount rate of 15%.
Determine the IRR for each project.
Rank the projects based on the profitability index.
Decide which project(s) should be selected if the company's policy is to accept all projects with a positive NPV.
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