Zainal plans to open a do-it-yourself car washing centre in his workshop. The bathing equipment...

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Accounting

Zainal plans to open a do-it-yourself car washing centre in his workshop. The bathing equipment will cost RM160,000. Zainal expects the after tax cash inflows to be RM40,000 annually for 7 years, after which he plans to scrap the equipment and retire to the beaches of Tioman.
i. What is the projects payback period?
ii. If the required return is 13%. What is the projects PI? Should it be accepted?

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