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Determine the project payback period

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Question - A project will require an initial investment of $600,000 and is expected to generate the following cash flows:

Year1 Year2 Year3 Year4 Year5

$100,000 $250,000 $250,000 $200,000 $100,000

(a) What is the project's payback period?

(b) If the required rate of return is 20% and taxes are ignored, what is the project's net present value?

Reference no: EM131800196

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