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Using a WACC of 15%, apply four capital budgeting techniques to evaluate the project, assuming the Free Cash Flows are as follows: Years Free Cash...

Using a WACC of 15%, apply four capital budgeting techniques to evaluate the project, assuming the Free Cash Flows are as follows: 

Years Free Cash Flows 

0 $ -252,000.00 

1 $118,625.00 

2 $127,125.00 

3 $181,000.00 

The four techniques are NPV, IRR, MIRR, and discounted Payback. Assume the reinvestment rate to be 8% for the MIRR. Also, assume that the business will only accept projects with a payback period of two and half years or less

Top Answer

1. Npv = -initial cash outflow + present value of cash inflows... View the full answer

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