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GHI Ltd. is planning to invest in a project that requires $1,200,000 upfront. The project will bring in the following cash inflows: Year 1: $200,000

GHI Ltd. is planning to invest in a project that requires $1,200,000 upfront. The project will bring in the following cash inflows:

  • Year 1: $200,000
  • Year 2: $210,000
  • Year 3: $220,000
  • Year 4: $230,000
  • Year 5: $240,000

Requirements:

  1. Calculate the Accounting Rate of Return (ARR).
  2. Determine the Payback Period.
  3. Compute the Net Present Value (NPV) at a 10% discount rate.
  4. Find the Internal Rate of Return (IRR).
  5. Analyze and decide if the project is financially viable.

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