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Dragon Products Company is considering two projects. The projects' cash flows are as follows: Cash Flow 0 1 2 3 4 5 6 Discount Rate

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Dragon Products Company is considering two projects. The projects' cash flows are as follows: Cash Flow 0 1 2 3 4 5 6 Discount Rate PROJECT A ($9300) 2500 1730 1500 3600 2500 2200 4.2% REQUIRED 1. Find the Payback Period 2. What is the discounted PBP? 3. Calculate the Net Present Value of the project and? 4. What is the profitability index of ? 5. Calculate the IRR of the project using trial and error method. 6. Why is sunk cost not considered when deciding about selecting a project? Which cost is considered and why? [60 marks]

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