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You are evaluating a project that will cost $ 527,000?, but is expected to produce cash...

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Finance

You are evaluating a project that will cost $ 527,000?, but isexpected to produce cash flows of $ 125 comma 000 per year for 10?years, with the first cash flow in one year. Your cost of capitalis 11 % and your? company's preferred payback period is three yearsor less.

a. What is the payback period of this? project?
b. Should you take the project if you want to increase the value ofthe? company?

Answer & Explanation Solved by verified expert
4.2 Ratings (903 Votes)
aProjects Payback Period The Payback Period Method refers to the period in which the proposed project will generate the cash inflows to recover the Initial Investment costs It considers only three components such as Initial    See Answer
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