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## Consider the project with the following expected cash flows.

Assignment Help Finance Consider the project with the following expected cash flows.

# Consider the project with the following expected cash flows.

Consider the project with the following expected cash flows… Show more Capital Budgeting Practice Problems Consider the project with the following expected cash flows: Year Cash flow 0 -\$400,000 1 \$100,000 2 \$120,000 3 \$850,000 If the discount rate is 0%, what is the project’s net present value? If the discount rate is 2%, what is the project’s net present value? If the discount rate is 6%, what is the project’s net present value? If the discount rate is 11%, what is the project’s net present value? With a cost of capital of 5%, what is this project’s modified internal rate of return? Now draw (for yourself) a chart where the discount rate is on the horizontal axis (the “x” axis) and the net present value on the vertical axis (the Y axis). Plot the net present value of the project as a function of the discount rate by dots for the four discount rates. connect the four points using a free hand ‘smooth’ curve. The curve intersects the horizontal line at a particular discount rate. What is this discount rate at which the graph intersects the horizontal axis? I will rate the most complete answer. Thank You. • Show less

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