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Brian's Auto is looking at making an investment of $ 7 8 4 , 0 0 0 in new machinery They expect to generate the
Brian's Auto is looking at making an investment of $ in new machinery They expect to generate the following Eamings Before Amortization and Taxes as well as the following positive, aftertax cash flows:
tableYearFs belore amortivation,Cash flowsafter taxYears before amortization,cash flowsafter tax$
a Compute the Average Accounting Return assuming the asset will be fully depreciated over the sixyear time period, using straightline depreciation, and Brian's Auto has a percent tax rate. Round your answer to two decimal places E
b Compute the payback period in vears, and the internal rate of return for the project
c Compute net present value of the project if WACc is percent.
d Should the project be undertaken, and why?
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