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ABC Corporation is evaluating a project requiring an initial investment of $500,000. The expected net inflows are as follows: Year Net Inflow 1 $100,000 2

ABC Corporation is evaluating a project requiring an initial investment of $500,000. The expected net inflows are as follows:

Year

Net Inflow

1

$100,000

2

$120,000

3

$150,000

4

$130,000

5

$180,000

Requirements:

  1. Calculate the Accounting Rate of Return (ARR).
  2. Determine the Payback Period.
  3. Compute the Net Present Value (NPV) assuming a discount rate of 8%.
  4. Calculate the Internal Rate of Return (IRR).

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