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A capital project requires an initial capacity of outlay of 2,000,000 and will return the following...

A capital project requires an initial capacity of outlay of 2,000,000 and will return the following amounts (paid at the end of the 5 years) 600,000, 500,000, 250,000, 150,000, 75,000 solve for each, assume that cost of the capital 10% per year, solve for a) payback b) net present value c)internal rate of return d)present value index please explain profitable or not or any other key elements

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Answer #1

As PI < 1 and NPV <0 and IRR< 0, the project is not profitable.

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