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You are evaluating a capital budgeting project that costs $25,000 and is expected to generate cash...

  1. You are evaluating a capital budgeting project that costs $25,000 and is expected to generate cash flows equal to $10,000 per year for four years. The required rate of return is 10 percent. Compute the project’s (a) net present value, (b) profitability index, and (c) internal rate of return. (d) Should the project be purchased?
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