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TechGear Inc. plans to upgrade its manufacturing software at a cost of $500,000. The upgrade is expected to generate additional annual cash flows of $120,000
TechGear Inc. plans to upgrade its manufacturing software at a cost of $500,000. The upgrade is expected to generate additional annual cash flows of $120,000 for 6 years. The company’s discount rate is 11%.
Requirements:
- Calculate the NPV of the software upgrade.
- Determine the IRR.
- Compute the payback period.
- Calculate the ARR based on the average investment.
- Should TechGear Inc. upgrade its manufacturing software?
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