Net present value and internal rate of return methods
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Company want to buy a machine for 66,000. The annual cash flow have the following projections
Year Cash flow
1 21,000
2 29,000
3 36,000
4 16,000
5 8,000
If the cost of capital is 10 percent what is the net present value?
What is the internal rate of return?
Should the project be accepted? Why?
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Excel file shows calculations of net present value and internal rate of return .
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