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A small company purchased now for $120,000 will lose $300 each year for the first four years. An additional $600 in the company in the fourth year will result in a profit of $9500 each year from the fifth through the twelfth year. At the end of 12 years, the company can be sold for $135,000.

a) Draw the cash flow diagram
b) Determine the IRR for this project.
c) Calculate the FW if MARR is 5%.
d) Calculate the ERR when =7%.

Sagot :

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