Calculate the payback and the discounted payback

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You are the brand manager at a large confectionary company. You have been asked to complete an analysis on a new product launch. The initial investment required for this new product is $100.

The following cashflows have been projected by the marketing team, over the next four years.

Year 1  $50
Year 2   40
Year 3   40
Year 4   15

Problme 1: Your finance partner has told you that the company's required rate of return is 15%. Calculate the Payback, the Discounted Payback, NPV and IRR for this new product launch.

Problme 2: In a brief paragraph, explain which methodology is the most effective and why? Would your thinking change if you were planning on changing roles within your company in the next 2-3years.

Reference no: EM132970483

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