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Question Roberts Company is considering an investment in equipment thatis capable of producing more

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Roberts Company is considering an investment in equipment thatis capable of producing more efficiently than the currenttechnology. The outlay required is $1,638,000. The equipment isexpected to last five years and will have no salvage value. Theexpected cash flows associated with the project are as follows:

Year

Cash Revenues

Cash Expenses

1

$2,129,400

$1,638,000

2

$2,129,400

$1,638,000

3

$2,129,400

$1,638,000

4

$2,129,400

$1,638,000

5

$2,129,400

$1,638,000

Required:

a. Compute the project’s payback period

b. Compute the project’s accounting rate of return

c. Compute the project’s net present value, assuming a requiredrate of return of 10 percent

d. Compute the project’s internal rate of return.

Apr 22 2020 View more View Less

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