Suppose your firm is considering investing in a project with the cash flows shown below,...
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Finance
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 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. (Do not round intermediate calculations and round your final answer to 2 decimal places.)
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