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What is the payback period for the project

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Reference no: EM132837371

Question - Jane plans to open a bike repair shop in Scarborough. She will operate the shop for five years and then she plans to move to the coast. The repair equipment will cost $95,000 and Jane expects the after tax cash flows to be $26,200 a year.

Required -

a. What is the payback period for the project?

b. Assuming a required rate of return of 9.5% for her project what is the IRR?

c. What are the advantages/disadvantages of using each method? Explain.

Reference no: EM132837371

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