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Graphic Publishing is considering a new graphic and design facility that will involve a large initial...

Graphic Publishing is considering a new graphic and design facility that will involve a large initial outlay and expected the following net cash flows.

Year Project Cash Inflows
1 $500,000
2 $500,000
3 $500,000
4 $500,000
5 $500,000

The project has a conventional payback period of 2.39 years, Calculate the project's internal rate of return?

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Answer #1


Solution: Payback period=Initial investment/annual cash in flow 2.39=Initial investment/500000 Initial investment=2.39*500000

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