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Q4. The City of Hail is considering the purchase of new road repair equipment costing SAR40,000 to achieve cash savings of SAR8,000 per year in

Q4. The City of Hail is considering the purchase of new road repair equipment costing SAR40,000 to achieve cash savings of SAR8,000 per year in operating costs. The estimated useful life is 10 years, with no terminal value. The citys minimum expected return is 14%.

a. What is the net present value of this investment?

b. What is the internal rate of return?

d. What is the payback period?

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