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    Capital Budgeting

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    Given the following project cash flows, identify the correct statement(s). The firm's cost of capital is 15%.

    Cash Flow

    0 -50
    1 150
    2 75
    3 -10

    I. This project will have two IRRs.
    II. The NPV of the project is $180.57.
    III. The profitability index of the project is 2.61.
    IV. The payback period of the project is 1.33.

    a. I only
    b. II only
    c. II and III only
    d. IV only
    e. I and IV only

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    Solution Summary

    Answers a multiple choice question on Capital Budgeting.