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Lynas Ltd. is planning to invest $2,150,000 in a new mining site. The company uses payback period criteria of not accepting any project that takes
Lynas Ltd. is planning to invest $2,150,000 in a new mining site. The company uses payback period criteria of not accepting any project that takes more than 4 years to recover costs. The company anticipates cash flows of $750,000, $850,000, $950,000, $1,500,000, $2,700,000, and $3,000,000 over the next 6 years.
Does this investment meet the companys payback criteria?
(Show all of your calculation).
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