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For the this question you have a firm that is considering investing in the following project: - Initial investment =$500,000. - Investment is depreciated over
For the this question you have a firm that is considering investing in the following project: - Initial investment =$500,000. - Investment is depreciated over a 5-year period (using straight line depreciation). - I.e., annual depreciation expense =$100,000. - Project revenue per year =$475,000. - Project variable costs =$100,000. - Project fixed costs =$100,000. - Tax rate =40%. - Opportunity cost of capital =12%. Part A: Compute the payback period. Part B: Compute the accounting rate of return. Part C: Compute the internal rate of return. Part D: Compute the net present value
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