Compute the payback period for this project

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Q1. Your Favorite Floral's is going to renovate the front room of their shop and the sign to attract more customers. The changes will cost $15,000. The cash flows resulting from the investment are as follows: Year 1: $7,000; Year 2: $8,000; Year 3: $2,000. Calculate the IRR of the project.

Q2. Claire's Creations currently sells hand-made jewelry. They are considering making other crafts to sell to a wider market. The cost of expanding the business is $4,000. The net cash flows resulting from the investment are as follows: Year 1: $2,500; Year 2: $3,000; Year 3: $2,750. Compute the payback period for this project.

Q3. Ace Donuts corporation is thinking about investing in a new doughnut machine. The cost of the machine is $250,000. The net cash flows resulting from the investment are as follows: Year 1: $85,000; Year 2: $100,000; Year 3: $150,000. The company's cost of capital is 15.00%. Compute the NPV of the project.

Reference no: EM133131084

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