2) A firm is evaluating a proposal that has an initial investment of $50,000 and has cash flows of $15,000 per year for 5 years. If the firms required return or cost is 15%, should it accept the project using the internal rate of return (IRR) as a decision criteria ?
3) What is the net present value (NPV) for a project whose cost of capital is 12% and its initial after tax cost is $5,000,000 and it is expected to provide after tax operating cash flows of $1,800,000 in year 1, $1,900,000 in year 2, $1,700,000 in year 3, and ($1,300,000) in year 4 ?
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