NPV / IRR homework question

Aug 10th, 2014
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


Year 2


Year 3


Year 4


Year 5



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?

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(Top Tutor) Mans K
School: UCLA

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