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5. Applying a decision method with net cash flows that are the same each year is quite unrealistic due to the nature of fluctuating sales.
5. Applying a decision method with net cash flows that are the same each year is quite unrealistic due to the nature of fluctuating sales. If a capital project investment cost is $600,000 but generates positive net cash flows of $85,000, $95,000, $120,000, $150,000 and $175,000 respectively for years 1 through 5, what is the payback period? What is the discounted payback period if the required rate of return is 7% (3pts)
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