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An investment project is estimated to have an initial cost of sh. 400, 000. Its stream of earnings before depreciation and taxes during first year

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An investment project is estimated to have an initial cost of sh. 400, 000. Its stream of earnings before depreciation and taxes during first year through year five is expected to be sh. 100, 000, sh. 120, 000, sh. 140,000 sh. 160, 000 and sh. 200,000. The salvage value at the end of year 5 is expected to be sh. 80,000. However the market value is estimated to be sh. 90,000 Assume a 30% tax rate and depreciation on straight line basis. The discount rate is 12% Required: Compute the project's i. Payback period ii. Accounting rate of return iii. Net present value iv. Profitability index V. Internal rate of return

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