Why should caledonia focus on project free cash flows as

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Reference no: EM13388533

1 Why should Caledonia focus on project free cash flows as opposed to the accounting profits earned by the project when analyzing whether to undertake the project?  ( 5 Points)   

2 What are the incremental cash flows for the project in years 1 through 5 and how do these cash flows differ from accounting profits or earnings?  ( 30 points)

3 What is the project’s initial outlay? ( 15 points)       

4 Sketch out a cash flow diagram for this project. ( 10 points)       

5 What is the project’s net present value? ( 10 points)

6 What is its internal rate of return? (10 points)       

7 Should the project be taken on?  (Explain your answer) ( 5 points)

Reference no: EM13388533

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