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How evaluate project desirability using net present value

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ABC Company is considering an investment project. The project's estimated initial investment is $60,000, it is also estimated to produce net annual cash inflow of $25,000 in each of the five years of the project's life. ABC accepts projects if they pay the initial investment within 3 years.

Question 1: If the required rate of return is 12%, evaluate the project's desirability using:

a) Payback period

b) The net present value method

c) The profitability index method

Reference no: EM132595898

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