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Calculate the project discounted payback

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The Potong Trim and Cut Company can purchase equipment on sale for RM4,300. The asset has a three-year life, will produce a cash flow of RM1,200 in the first and second year, and RM3,000 in the third year. The interest rate is 12%. Calculate the project's Discounted Payback and Profitability Index assuming end of year cash flows. Should the project be taken? If the Average Accounting Return was positive, how would this affect your decision?

Reference no: EM132548249

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