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XYZ Ltd. is considering an investment of $800,000. The expected net cash inflows are: Year Net Inflow 1 $150,000 2 $160,000 3 $170,000 4 $180,000

XYZ Ltd. is considering an investment of $800,000. The expected net cash inflows are:

Year

Net Inflow

1

$150,000

2

$160,000

3

$170,000

4

$180,000

5

$190,000

Requirements:

  1. Calculate the Accounting Rate of Return (ARR).
  2. Determine the Payback Period.
  3. Compute the Net Present Value (NPV) at a 9% discount rate.
  4. Calculate the Internal Rate of Return (IRR).
Decide on the project's acceptance based on the calculated metrics.

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