PLEASE DO QUESTION #25 please show work, thank you!!! For questions 25 and 26 us

Question

PLEASE DO QUESTION #25
please show work, thank you!!!

For questions 25 and 26 use the following information A company is considering a project with the listed cash flows below with a required rate of return of 8.00% 0 2 4 5 Year Cash Flow $125 $50 $40 $30 $20$10 25. Calculate NPV and use the MPV decision rule to evaluate this project. Should this project be accepted or rejected? 26. Calculate MIRR and use the MIRR decision rule to evaluate this project. Should this project be accepted or rejected?

Explanation / Answer

Computation of NPV:

Year

0

1

2

3

4

5

Cash flows

-125

50

40

30

20

10

Discounting factor at 8%

1

0.92593

0.85734

0.79383

0.73503

0.68058

PV of cash flows

-125

46.296

34.294

23.815

14.701

6.806

NPV = sum of all PV of cash flows

0.911

We have a positive NPV , the project should be accepted.

Year

0

1

2

3

4

5

Cash flows

-125

50

40

30

20

10

Discounting factor at 8%

1

0.92593

0.85734

0.79383

0.73503

0.68058

PV of cash flows

-125

46.296

34.294

23.815

14.701

6.806

NPV = sum of all PV of cash flows

0.911

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