You are evaluating a project that will cost $486,000, but is expected to produce cash flows of
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You are evaluating a project that will cost $486,000, but is expected to produce cash flows of $120,000 per year for 10 years, with the first cash flow in one year. Your cost of capital is 11.1% and yourcompany's preferred payback period is three years or less.
a. What is the payback period of thisproject?
b. Should you take the project if you want to increase the value of thecompany?
a. What is the payback period of thisproject?
The payback period is _____ years
b. Should you take the project if you want to increase the value of thecompany?
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