Leo Company Is Considering A New Venture In Office Equipment It Expects The Cost Of Acquisition Of Land And Building To 1 (31.21 KiB) Viewed 24 times
Leo Company Is Considering A New Venture In Office Equipment It Expects The Cost Of Acquisition Of Land And Building To 2 (10.97 KiB) Viewed 24 times
Leo company is considering a new venture in office equipment. It expects the cost of acquisition of land and building to be $100,000. Leo company expects cash flows to be $40,000 the first year (i.e., CF₁) and $45,000 for the next 4 years (i.e., CF2 - CF5). It will discontinue the furniture operation upon the completions of the 5th year. Assume no salvage value. The company's WACC is 10%. Question 29 (3.125 points) What is Leo company's MIRR? Assume the reinvestment rate from the project cash inflows is the same as the firm's WACC
What is Leo company's NPV and should they accept or reject the project? Assume no other projects exist and that NPV should be used to make the decision.
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