# NPV / IRR homework question

Aug 10th, 2014
Anonymous
Category:
Accounting
Price: \$20 USD

Question description

1.  Jackson Company is considering the investment in a computer system.  The company estimates that it will require an initial outlay of \$1,200,000.  Other cash flows will be as follows:

 Year 1 (\$600,000) Year 2 150,000 Year 3 620,000 Year 4 725,000 Year 5 800,000

Required:

Assuming the company limits its analysis to five years, should the company consider this investment? Calculate the net present value of this project with a required rate of return of seven percent. Also, does your answer change if the required rate of return is 12 percent?

(Top Tutor) Mans K
School: UCLA

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