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RST Company is considering a capital investment of $600,000 in a new project. The project will generate the following annual cash inflows: Year Net Inflow
RST Company is considering a capital investment of $600,000 in a new project. The project will generate the following annual cash inflows:
Year | Net Inflow |
1 | $110,000 |
2 | $120,000 |
3 | $130,000 |
4 | $140,000 |
5 | $150,000 |
Requirements:
- Calculate the Accounting Rate of Return (ARR).
- Determine the Payback Period.
- Compute the Net Present Value (NPV) at an 8% discount rate.
- Calculate the Internal Rate of Return (IRR).
- Provide a recommendation based on the financial metrics.
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