Make an accept-reject decision based on the results in part

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Company ABC received a contract from company XYZ, worth $460 million to build a product. XYZ will pay $50 million when the contract is signed, another $360 million at the end of the first year, and the $50 million balance at the end of second year. The expected cash outflows required to produce the product are estimated to be $150 million now, $100 million during the first year, and $218 million during the second year. The firm’s MARR is 25% for this project. a) Compute the NPW at 25% b) Compute the values of i*’s for this project c) Make an accept-reject decision based on the results in part (b). Calculate IRR. Can you please also show your work?

Reference no: EM131510767

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