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