the following is provided for a capital-budgeting project:
Net initial investment $100,000
Estimated useful life 4 years
Estimated before-tax annual cash flow from operations $33,000
Estimated terminal disposal value $7,000
Required rate of return 12%
Income tax rate 30%
straight-line depreciation is used.
a. Compute NPV.
b. Compute IRR (to the nearest tenth of a percent).
c. Compute payback.
d. Compute AARR on net initial investment (to the nearest tenth of a percent).
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