Problem 8-27, Project Installed will provide annual cash flows…

Fundamentals of Corporate Finance

Brealey, Myers, and Marcus

10th Edition

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Given the cost of the project and its annual cash flows for the next couple of years, calculate the payback, determine whether it should be accepted, calculate the NPV, and based on this, whether it will be accepted. Finally, repeat the exercise with a different discount rate and state whether or not the firm's decision changes as the discount rate changes.

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