Determine if the project is acceptable or not

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Consider a project that requires an initial investment with the following patterns of cash flow.

n 0 1 2 3 4 5
Receipt $0 500 500 500 500 500
Disbursement $1000 100 140 180 220 260

a) Compute the net cash flow and show it in a table or diagram.
b) Find the internal rate of return IRR (i*) of this project.
c) Using the IRR criterion, determine if the project is acceptable. The firm's MARR is 10%.
Hint: To solve for i* manually, you may start with a guess value for i*=10%, then increase or decrease by 5 (i.e., 15, 20; or, 5, 0, etc.).

Reference no: EM13204853

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