Solution-Generate in annual cash flows

Generate in annual cash flows

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Brown's Industries is considering a project requiring an initial investment of $200,000 followed by annual cash inflows of $45,000 for the next six years. A second six-year project has an initial outlay of $325,000.

a. How much would the second project have to generate in annual cash flows to have the same IRR as the first?

b. If Brown's cost of capital is 8%, how much would the second project have to generate in annual cash flows to have the same NPV as the first project.

Explain your answers.

Reference no: EM131473445

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Generate in annual cash flows

Reference no: EM131473445

Reference no: EM131473445

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