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What project worth today at discount rate of fifteen percent

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Problem 1: Erickson's is considering a project with an initial cost of $623,000. The project will produce cash inflows of $33,500 monthly for 21 months. What is the annual rate of return on this project?

A. 11.57%

B. 13.59%

C. 16.59%

D. 17.47%

E. 18.44%

Problem 2: A project is expected to produce cash flows of $5,000, $8,000, and $16,000 over the next three years, respectively. After three years, the project will be discontinued. What is this project worth today at a discount rate of 15 percent?

A. $19,201.76

B. $19,435.74

C. $20,917.24

D. $21,808.17

E. $22,758.00

Reference no: EM132958147

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