Question: Apple has gathered the following data on a proposed investment project:
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Cost of the Investment
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$1,200,000
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Estimated Salvage Value
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$0
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Annual cost inflows
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$240,000
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Life of the project
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10 years
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Discount rate
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10%
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Calculate the following:
Q1. What is the payback period for the investment?
Q2. What is the simple rate of return on the investment?
Q3. What is the net present value of the investment? Should the proposal be accepted? Why or why not?