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Inzaghi Ltd is evaluating a capital expenditure proposal that has the following forecast cash flows: Original investment 45,000 . 3 Cash flow: Year 1 Year

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Inzaghi Ltd is evaluating a capital expenditure proposal that has the following forecast cash flows: Original investment 45,000 . 3 Cash flow: Year 1 Year 2e Year 32 17,500 25,000 15,000 3 Scrap Value Discount rate 02 14% 4 Requirement a) Compute the net present value of the investment. 10 Marks b) Compute the proposal's internal rate of return and payback period. 10 Marks c) Compare and contrast the advantages and disadvantages of the net present value, the internal rate of return and the payback period as methods for investment appraisal. Should Inzaghi Ltd accept the capital expenditure proposal? Clearly explain your reasons

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