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A company is considering a proposal to invest $30,000 in a project that would provide the following net cash flows: Year 1 $6500 Year 2
A company is considering a proposal to invest $30,000 in a project that would provide the following net cash flows: Year 1 $6500 Year 2 $10,700 Year 3 $15,000 Year 4 $12,800 (a) Compute the project's payback period. (b) Compute the net present value of the project assuming a 10% discount rate with the following factors: PV factors for $1(yr 1: 0.9091; yr 2: 0.8264; yr 3:0 .7513; yr 4: 0.6830) (c) Should the company invest in the machine? Why or why not?
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