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    NPV, IRR

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    1. Shane industries is considering a project which has the following cash flows:
    Year Cash flow
    0 ($5,000)
    1 ?
    2 $2,000
    3 $3,000
    4 $3,000
    The project has a payback period of 2.5 years. The firm's discount rate is 10%. What are the project's Net Present Value (NPV) and Internal Rate of Return (IRR)?

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    Solution Summary

    The solution calculates the NPV and IRR of a project.