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The Walker Landscaping Company can purchase a piece of equipment for $3,500. The asset has a two-year life and will produce a net cash flow
The Walker Landscaping Company can purchase a piece of equipment for $3,500. The asset has a two-year life and will produce a net cash flow before tax of $600 in the first year and $4200 in the second year. The discount rate is 15%. The machine depreciates according to a straight-line method. Ignore corporate taxes. a) Find the project's accounting payback assuming steady cashflows. b) Find the project's average account return (AAR) c) Find the project's IRR. d) Calculate the project's discounted payback and Profitability Index assuming steady cashflows
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