Holly plans to open a pet-shop and to run the business for 5 years. The pet service

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Holly plans to open a pet-shop and to run the business for 5 years. The pet service equipment will cost $125,000. Holly expects after-tax cash flows to be $35,000 a year and her required rate of return is 10%.

a) What is the payback period for her project? (2 marks)

b) What is the discounted payback period? (2 marks)

c) What is the IRR of her project? Should she go ahead with it?

Related Book For answer-question

Introduction to Management Science A Modeling and Cases Studies Approach with Spreadsheets

ISBN: 978-0078024061

5th edition

Authors: Frederick S. Hillier, Mark S. Hillier

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Posted Date: Mar 07, 2024 06:18 AM

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Holly plans to open a pet-shop and to run the business for 5 years. The pet service

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a Payback Period To calculate the payback period we divide the initial investment by the annual afte... View the full answer

Introduction to Management Science A Modeling and Cases Studies Approach with Spreadsheets

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