Payback, Accounting Rate of Return, Net Present Value, Internal Rate of Return Booth Company wants to buy a numerically controlled

Payback, Accounting Rate of Return, Net Present Value, Internal Rate of Return
Booth Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of tractors. The outlay required is $960,000. The NC equipment will last 5 years with no expected salvage value. The expected after-tax cash flows associated with the project follow:
Required:
1. Compute the payback period for the NC equipment.
2. Compute the NC equipment’s ARR. Round the percentage to one decimal place.
3. Compute the investment’s NPV, assuming a required rate of return of 10%.
4. Compute the investment’s IRR.

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