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A company is thinking of buying, at a cost of 220 000, some new packaging equipment that is expected to save 50 000 in cash-operating
A company is thinking of buying, at a cost of 220 000, some new packaging equipment that is expected to save 50 000 in cash-operating costs per year. Its estimated useful life is 10 years, and it will have zero terminal disposal value. The required rate of return is 16 %. A) Calculate the payback period (2 points). B) Calculate the net present value (2 points). C) Calculate the internal rate of return (2 points).
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