Compute the payback period for the investment

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Problem A. The Black Package Group is thinking of buying, at a cost of $100,000, some new packaging equipment that is expected to generate $50,000 per year. Its estimated useful life is 5 years and it will have $5,000 as a disposal value. The required rate of return is 16%. Compute the net present value and payback period for this investment.

Problem B. An NPV analysis of an investment project shows that the project will generate +$3,600 based on a required rate of return of 10%. What does this mean?

Reference no: EM132967909

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