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Question 10.4: Consider a project with cash inflows of Y1 = $30,000, Y2 = $...

Consider a project with cash inflows of Y1 = $30,000, Y2 = $50,000, and Y3 = $70,000. The project costs $100,000 in year 0. Having just computed the NPV for this problem, we know that 12% is an insufficient discount rate to achieve an NPV of zero. Ideally, a test discounted cash inflows would bracket the initial investment of $100,000. Assume an IRR1 of 18% and compute a value test1.

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