Calculate payback period and net present value

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Harper company has an opportunity to expand their mold remediation operation. Their innovative approach is very effective and highly in demand. To expand their operation, they are seeking to build a second facility in southern New England. The cost to build the new facility, fit up and provide for additional start up working capital is $880,000, and carries a 7% opportunity cost to implement. Year 1, business at the new location will produce $350,000 in cashflow, years 2 to 4 will produce $250,000 cashflow each year, and year 5 will produce $200,000 in cashflow. Conservatively, management is looking at basing their decision solely on this 5-year forecast.

A. Calculate Payback period:

B. Calculate Net Present Value:

C. Calculate Internal Rate of Return:

Reference no: EM131915131

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