Find the payback period-firm investment choices

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As Chief Financial Officer (CFO), you are responsible for your firm's investment choices. You are considering whether or not to choose a project that will require a $15 million investment today and will generate $1 million in Year 1, $3 million in each of Years 2 through 5, $7 million in each of Years 6 through 8, and $12 million in each of Years 9 through 10. The appropriate interest rate is 15%.

a) Find the payback period.

b) Find the discounted payback period.

c) Should you take this project? Why or why not? Use the best method to justify your answer.

d) What is the IRR of the project?

Reference no: EM132505716

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