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What is the payback period of investment

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You are considering opening up a pharmacy in Melbourne. The pharmacy setup is expected to cost $10 million up-front and take a year to start its sales operation. After that, it is expected to make $5 million in the year it is opened and $2 million for the following four years. What is the payback period of this investment? If you require a payback period of three years, will you open up this pharmacy? Does the pharmacy project have positive NPV if the cost of capital is 10%?

Reference no: EM132953052

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