A firm must spend $10 million today on a project that is expected to bring in annual revenues of $1.5 million for the next 10 years (beginning at the end of year 1).
a.If the firm's cost of capital is 5%,what is the NPV of this project?
b.If the firm's cost of capital is 10%,what is the NPV of this project?
c.What is the internal rate of return?

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The Answer of A firm must spend $10 million today on a project that is expected to bring in annual revenues of $1.5 million for the next 10 years (beginning at the end of year 1).
a.If the firm's cost of capital is 5%,what is the NPV of this project?
b.If the firm's cost of capital is 10%,what is the NPV of this project?
c.What is the internal rate of return?

A Firm Must Spend $10 Million Today on a Project