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Will the project be accepted

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A project that costs $2,000 to install will provide annual cash flows of $530 for the next 5 years. The firm accepts projects with payback periods of less than 4 years.

a. What is this project's payback period? (Round your answer to 3 decimal places.)

b. Will the project be accepted?

c-1. What is project NPV if the discount rate is 4%? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)

c-2. Should this project be pursued?

d-1. What is project NPV if the discount rate is 11%? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)

d-2. Should this project be pursued?

e. Will the firm's decision change as the discount rate changes?

Reference no: EM132953775

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