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Fresh Fruits Industries Limited is attempting to undertake a project aim at expanding the firm’s production...

Fresh Fruits Industries Limited is attempting to undertake a project aim at expanding the firm’s production capacity. The relevant cash flows for the project are shown in the following tables.              

Year (t)                            GHS

   0                                (550,000)               

   1                                   110,000                      

    2                                  132,000                      

    3                                  165,000                       

    4                                  209,000                      

    5                                  275,000                      

  1. Calculate the NPV of the project if the cost of capital is 15%                           
  2. Calculate the NPV of the project if the cost of capital is 20%                           
  3. Calculate the Internal Rate of Return (IRR) for the project.                                 
  4. Why is there a conflict between NPV and IRR?                                                 

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Expert Solution

jeff jeffy answered 1 year ago
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