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For 50 years Young's Dairy Corporation has been a local favorite for ice cream and parties. Young's is considering a store expansion decision that has
For 50 years Young's Dairy Corporation has been a local favorite for ice cream and parties. Young's is considering a store expansion decision that has an estimated useful life of 20 years. This decision could capitalize on their near cult status in the community. This project has an internal rate of return of 15% and a payback period of 9.6 years. How would a decrease in the expected salvage value from this project in 20 years affect the following for this project?
Internal Rate of Return | Payback Period | |
---|---|---|
A) | Decrease | Decrease |
B) | No effect | Decrease |
C) | Decrease | No effect |
D) | Increase | No effect |
E) | No effect | No effec |
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