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Lightyear Ltd. is analyzing the purchase of new equipment at a cost of USD 220,000. It is estimated that it will reduce company cash outflows

Lightyear Ltd. is analyzing the purchase of new equipment at a cost of USD 220,000. It is estimated that it will reduce company cash outflows from operations by USD 50,000 per year. Its estimated life is ten years, and it will have zero terminal disposal value. The RRR is 16.0%.

REQUIRED:

  1. Compute the payback.
  2. Compute the discounted payback.
  3. Compute the NPV.
  4. Compute the IRR

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