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The company needs to analyze t $1 000 000., Which is planned to 1st year - $ 550 000, 2nd year - $ 600 000,

The company needs to analyze t $1 000 000., Which is planned to 1st year - $ 550 000, 2nd year - $ 600 000,

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The company needs to analyze the feasibility of investing in a project worth $1 000 000., Which is planned to receive cash flows during 3 years, namely: 1st year - $ 550 000, 2nd year $ 600 000, 3rd year - $720 000. Assess the acceptability of the project: 1) at the average market rate of return (discount rate) of 20%; 2) the average market rate of return changes and will be respectively: 20%, 30%, 10%.
Transcribed Image Text:The company needs to analyze the feasibility of investing in a project worth $1 000 000., Which is planned to receive cash flows during 3 years, namely: 1st year - $ 550 000, 2nd year $ 600 000, 3rd year - $720 000. Assess the acceptability of the project: 1) at the average market rate of return (discount rate) of 20%; 2) the average market rate of return changes and will be respectively: 20%, 30%, 10%.
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