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Roberts Company is considering an investment in equipment that is capable of producing more efficiently than the current technology. The outlay required is $2,200,000. The
Roberts Company is considering an investment in equipment that is capable of producing more efficiently than the current technology. The outlay required is $2,200,000. The equipment is expected to last five years and will have no salvage value. The expected cash flows associated with the project are as follows: The present value tables provided in Exhibit 19B.1 and Exhibit 19B.2 must be used to solve the following problems. Required: 1. Compute the project's payback period. If required, round your answer to two decimal places. years 2. Compute the project's accounting rate of return. Enter your answer as a whole percentage value (for example, 16% should be entered as " 16 " in the answer box). % 3. Compute the project's net present value, assuming a required rate of return of 10 percent. When required, round your answer to the nearest dollar. $ 4. Compute the project's internal rate of return. Enter your answers as whole percentage values. Between % and % Roberts Company is considering an investment in equipment that is capable of producing more efficiently than the current technology. The outlay required is $2,200,000. The equipment is expected to last five years and will have no salvage value. The expected cash flows associated with the project are as follows: The present value tables provided in Exhibit 19B.1 and Exhibit 19B.2 must be used to solve the following problems. Required: 1. Compute the project's payback period. If required, round your answer to two decimal places. years 2. Compute the project's accounting rate of return. Enter your answer as a whole percentage value (for example, 16% should be entered as " 16 " in the answer box). % 3. Compute the project's net present value, assuming a required rate of return of 10 percent. When required, round your answer to the nearest dollar. $ 4. Compute the project's internal rate of return. Enter your answers as whole percentage values. Between % and %
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