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A company is considering investing in a new project that requires an initial investment of $1,000,000. The projected cash flows from the project are as follows:   Year 1: $300,000 Year 2: $400,000 Year 3: $500,000 Year 4: $600,000   The company's required rate of return for similar projects is 12%. What is the Net Present Value (NPV) of the project?  What is the Internal Rate of Return (IRR) of the project? YOU MUST SHOW CALCULATIONS TO BACK UP YOUR SELECTION.   -$100,000// 12%   $250,000 // 10%   $250,000 // 14%   $350,000 // 14%   $50,000 // %14

A company is considering investing in a new project that requires an initial investment of $1,000,000. The projected cash flows from the project are as follows:   Year 1: $300,000 Year 2: $400,000 Year 3: $500,000 Year 4: $600,000   The company's required rate of return for similar projects is 12%. What is the Net Present Value (NPV) of the project?  What is the Internal Rate of Return (IRR) of the project? YOU MUST SHOW CALCULATIONS TO BACK UP YOUR SELECTION.   -$100,000// 12%   $250,000 // 10%   $250,000 // 14%   $350,000 // 14%   $50,000 // %14

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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  1. A company is considering investing in a new project that requires an initial investment of $1,000,000. The projected cash flows from the project are as follows:

     

    Year 1: $300,000

    Year 2: $400,000

    Year 3: $500,000

    Year 4: $600,000

     

    The company's required rate of return for similar projects is 12%. What is the Net Present Value (NPV) of the project?  What is the Internal Rate of Return (IRR) of the project? YOU MUST SHOW CALCULATIONS TO BACK UP YOUR SELECTION.

     

    1. -$100,000// 12%

       

    2. $250,000 // 10%

       

    3. $250,000 // 14%

       

    4. $350,000 // 14%

       

    5. $50,000 // %14

       
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