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r QUESTION 2 A company is considering investment of k1,000,000 in a project. The following are the forecasts, after depreciation and tax. Year Cash Inflows

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QUESTION 2 A company is considering investment of k1,000,000 in a project. The following are the forecasts, after depreciation and tax. Year Cash Inflows Discount Present Value 1 Factor at 10% 10,000 0.9091 40,000 0.8265 60,000 0.7513 20,000 0.6830 0.6209 1 2 3 4 5 Compute: a) Payback period (4 Marks) b) Discounted payback (8 Marks) c) Net present value (5 Marks) d) In all instances comment on the Decision criteria (8 Marks)

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