GHI Enterprises is contemplating a project with an initial outlay of $400,000. The project will...
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Accounting
GHI Enterprises is contemplating a project with an initial outlay of $400,000. The project will generate annual revenues of $130,000 for 5 years, with annual operating expenses (excluding depreciation) of $30,000. The asset will be depreciated on a straight-line basis over 5 years with no salvage value. The tax rate is 30%. Required:
- Determine the Payback Period (PBP) and ARR
- Calculate NPV and PI, given a discount rate of 9%
- Compute the IRR
- Calculate the discounted payback period
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