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Unformatted text preview: Net Cash Flow Fill in the table and calculate the present value and PI using a discount rate of 10%. What numbers would you use to calculate this value? Would you accept this project? Example Corporation can enter a contract with another computing firm. Example Corp will initially pay this firm 10$ and the other firm will pay Example Corp. $5 every year for five years. In the last year the firm will payback the initial deposit of $10. However a condition of the deal is that Example Corp. will not expand its computer business. The IRR for the above project is 11%. The IRR of the deal offered is 50%. Which deal should I take based on the IRR rule? Does this make sense? What else should we use to evaluate this decision?...
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This note was uploaded on 12/05/2011 for the course ENGINEERIN 111 taught by Professor Melihabulu-taciroglu during the Fall '11 term at UCLA.
- Fall '11