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XYZ Ltd. plans to invest $500,000 in a new product line. The expected cash flows are as follows: Year 1: $100,000 Year 2: $120,000 Year
XYZ Ltd. plans to invest $500,000 in a new product line. The expected cash flows are as follows:
•Year 1: $100,000
•Year 2: $120,000
•Year 3: $140,000
•Year 4: $160,000
•Year 5: $180,000
Requirements:
1.Calculate the NPV at a discount rate of 8%.
2.Find the IRR.
3.Determine the discounted payback period.
4.Compute the ARR based on the initial investment.
5.Assess the project's feasibility based on NPV and IRR.
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