ABC Inc. is considering a project with an initial cost of $1,406.
Question 1 ABC Inc. is considering a project with an initial cost of $1,406. The project will not produce any cash flows for the first three years. Starting in year four, the project will produce cash inflows of $730 a year for three years. This project is risky, so the firm has assigned it a discount rate of 18 percent. What is the project's net present value? Question 2 Which of the following is the correct definition of Internal Rate of Return (IRR)? IRR is the project's current market rate of return. IRR is the same as Average Accounting Rate of Return. IRR is the rate at which the Net Present Value (NPV) equals zero. IRR is the rate at which the Net Prsent Value (NPV) equals Initial Cost. IRR is the rate of return required by project's investors Question 3 What is the profitability index of a proj...