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Don Johnson is a divisional manager for Chargers Company. His annual pay raises are largely determined by his division's return on investment (ROI), which has
Don Johnson is a divisional manager for Chargers Company. His annual pay raises are largely determined by his division's return on investment (ROI), which has been above 20% each of the last three years. Don is considering a capital budgeting project that would require a $4,200,000 investment in equipment with a useful life of five years and no salvage value. Chargers Company's discount rate is 18%. The project would provide net operating income each year for five years as follows: 1. Compute the Present Value amount for the following: A. Now B. Year 1 C. Year 2 D. Year 3 E. Year 4 F. Year 5 2. Compute the project's total Net Present Value. 3. Compute the project's accounting rate of return. - round to (1) decimal place, enter number as a percent
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