Find the net present value for janet cara-van company

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Janet Cara-Van Company plans to acquire equipment costing USD 600,000.00. Depreciation on the new equipment would be USD 120,000.00 each year for 5 years. The annual cash inflow before income tax from this equipment has been estimated at USD 220,000.00. The tax rate is 40%.

Problem a. Find the accounting rate of return.

Problem b. Indicate the relevant cash flows.

Problem c. Find the net present value if the minimum acceptable rate of return on investment is 16%.

Problem d. Find the payback period. Estimate the internal rate of return.

Reference no: EM132760271

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