Cost of capital-generate cash flows


A project is expected to generate cash flows of $14,000 annually for five years plus an additional $27,000 in year 6. The cost of capital is 10%.

a. What is the most that you can invest in this project at time 0 and still have a positive NPV?

b. What is the most that you can invest in this project at time 0 if you want to have a 15% IRR?

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Business Management: Cost of capital-generate cash flows
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