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What is the payback period projected

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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 $25,200 a year.

a. What is the payback period projected?

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 in question a and b? please explain?

Reference no: EM132545446

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