Question Tundra Toys wants to acquire another similar company. It estimates that net cash flows for the acquired company will be $800,000 per year for 10 years. The cost is $5,000,000. The company's cost of capital is 12 %.
Q1. Calculate NPV, IRR, and MIRR.
Q2. Should the company go ahead with the project based on your calculations? Why or why not?
Q3. What factors might change your recommendation?