ABC Corp is considering a project that involves: Initial cost: $250,000 Expected cash inflows: Year 1: $55,000
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Question:
- Initial cost: $250,000
- Expected cash inflows:
- Year 1: $55,000
- Year 2: $60,000
- Year 3: $65,000
- Year 4: $70,000
- Year 5: $75,000
Requirements:
- Calculate the accounting rate of return (ARR).
- Evaluate the project’s NPV at a 10% discount rate.
- Calculate the payback period and discounted payback period.
- Assess the IRR.
Related Book For
Principles of managerial finance
ISBN: 978-0132479547
12th edition
Authors: Lawrence J Gitman, Chad J Zutter
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