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    IRR and NPV

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    Duron Company is considering a project requiring $1 million initial investment.

    Expected cash inflows will be:
    ? $25,000 in the first year
    ? $100,000 in the second year
    ? $200,000 per year for the next six years.

    a. Calculate the project's IRR and the NPV assuming an 8% cost of capitol.

    b. How much would each of the last six payments have to be to make the project's NPV $100,000?

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    Solution Preview

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    (a) Answer:
    For NPV:
    Year Cash Flow PV factor@8% PV of cash ...

    Solution Summary

    This solution is comprised of questions from IRR and NPV.