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Business, 25.02.2020 23:15 nicolemaefahey

A. You are the financial officer of a local auto and bus repair company. A local tour operator agent offers you the following contract. You provide bus repairs over the next five years for free and receive 50,000 today. You project the cost of the repairs to be 10,000 in the first two years and 15,000 in the following three years (i) What is the IRR of this stream of cash flows. (ii) If your cost ofcapital is 700, what does the IRR rule tell you to do? (???) What is the NPV? What is the NPV if your cost of capital were 12%? Discuss what is going on

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