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the following is provided for a capital-budgeting project:

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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