Cornell systems analyzed the project whose cash flows are


Cornell Systems analyzed the project whose cash flows are shown below. It is 100% debt financed. The tax rate is 20%. The yield on company`s bond is 6,25% Year 0 1 2 3 Cash flows -$950 $500 $400 $300 Calculate the projects NPV, Profitability ratio and decide whether you accept it or not. If the payback period acceptable for a company in 2.5 years, would you accept a project, being based on discounted cash flows?

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Financial Management: Cornell systems analyzed the project whose cash flows are
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