Assume a cost improvement project has only a firstcost of

Chapter , Problem 9-80

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Assume a cost improvement project has only a firstcost of $100,000 and a monthly net savings,M.There is no salvage value. Graph the projects IRRfor payback periods from 6 months to the projectslife ofNyears. The firm accepts projects with a 2-year payback period or a 20% IRR. When are thesestandards consistent and when are they not?(a)Assume thatN= 3 years.(b)Assume thatN= 5 years.(c)Assume thatN= 10 years (d)What recommendation do you have for the firmabout its project acceptance criteria?

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