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OPQ Enterprises is looking at a new project which involves an initial outlay of $400,000. The net cash inflows for the next five years are

OPQ Enterprises is looking at a new project which involves an initial outlay of $400,000. The net cash inflows for the next five years are expected to be:

  • Year 1: $90,000
  • Year 2: $100,000
  • Year 3: $110,000
  • Year 4: $120,000
  • Year 5: $130,000

Requirements:

  1. Calculate the Accounting Rate of Return (ARR).
  2. Determine the Payback Period.
  3. Compute the Net Present Value (NPV) at a discount rate of 9%.
  4. Find the Internal Rate of Return (IRR).
  5. Analyze the project's financial feasibility.

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