Problem

You wish to evaluate a project requiring an initial investment of $45,000 and having a use...

You wish to evaluate a project requiring an initial investment of $45,000 and having a useful life of 5 years. What minimum amount of annual cash inflow do you need if your firm has an 8% cost of capital? If the project is forecast to earn $12,500 per year over the 5 years, what is its IRR? Is the project acceptable?

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Solutions For Problems in Chapter 12