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XYZ Manufacturing is evaluating a new machinery project: Initial investment: $300,000 Annual net cash inflows: Year 1: $60,000 Year 2: $70,000 Year 3: $80,000 Year

XYZ Manufacturing is evaluating a new machinery project:
  1. Initial investment: $300,000
  2. Annual net cash inflows:
    • Year 1: $60,000
    • Year 2: $70,000
    • Year 3: $80,000
    • Year 4: $90,000
    • Year 5: $100,000

Requirements:

  • Calculate the payback period.
  • Determine the Net Present Value (NPV) using a discount rate of 8%.
  • Compute the Internal Rate of Return (IRR).
  • Find the Profitability Index (PI).

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