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A Corporation has been presented with an investment opportunity which will yield cash flows of $30,000 a year in Years 1 through 4, $35,000 a
A Corporation has been presented with an investment opportunity which will yield cash flows of $30,000 a year in Years 1 through 4, $35,000 a year in Years 5 through 9, and $40,000 in Year 10. This investment will cost the firm $150,000 today, and the firs's cost of capital is 10 percent. What is the payback period for this investment? (Assume that cash flows occur evenly during the year, 1/365th each day.)
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