Carmen electronics purchased new machinery for 5

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9.Carmen Electronics purchased new machinery for $5 million. This is expected to result in additional cash flows of $1.2 million per year over the next seven years. What is the payback period for this project? If the company’s acceptance period is five years, will thisproject be accepted?
10.Explain (in words) the Payback Period method and include its good points and drawbacks. Compare it to the Net Present Value method and explain why that method isa superior capital budgeting method compared to the Payback Period method.

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