Hsung Company accumulates the following data concerning a proposed capital investment: cash cost $215,000, net annual cash flows $40,000, present value factor of cash inflows for 10 years 5.65 (rounded).
Net present value = 40000*5.65 = $226,000
This is based on discount factor 12%
Initial investment =$215,000 < $226,000 it is profitable to go ahead with this project.
IRR =13.2% > 12%. Hence the project is worthwhile
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