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DEF Corporation is considering a project with an initial investment of $1,000,000. The expected net inflows are: Year Net Inflow 1 $180,000 2 $190,000 3

DEF Corporation is considering a project with an initial investment of $1,000,000. The expected net inflows are:

Year

Net Inflow

1

$180,000

2

$190,000

3

$200,000

4

$210,000

5

$220,000

Requirements:

  1. Calculate the Accounting Rate of Return (ARR).
  2. Determine the Payback Period.
  3. Compute the Net Present Value (NPV) at a discount rate of 8%.
  4. Calculate the Internal Rate of Return (IRR).
Evaluate the project's potential for profitability.

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