Primus Corp. is planning to convert an existing warehouse into a new plant that will increase its production capacity by 45 percent. The cost of this project will be $7,125,000. It will result in additional cash flows of $1,875,000 for the next eight years. The discount rate is 12 percent.
a. What is the payback period?
b. What is the NPV for this project?
c. What is the IRR?
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