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Find what is the payback period in years

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Reference no: EM132663305

Project X is estimated to generate cash flows of $40,000 per year for 10 years. The cost of the project is $226,009. Project X is expected to improve the competitiveness of the company as leader in the industry. It is the policy of the company to approve only capital investment with payback of five years or lower and IRR of at least 13%.

Problem a. What is the internal rate of return for this project?

Problem b. What is the payback period in years?

Problem c. Should the project be approved and why?

Reference no: EM132663305

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