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