Aster Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $800,000 and yield the following expected cash flows. Management requires investments to have a payback period of two years, and it requires a 10% return on its investments. Period Cash Flow 1 . . . . . . . . . . . . $300,000 2 . . . . . . . . . . . . 350,000 3 . . . . . . . . . . . . 400,000 4 . . . . . . . . . . . . 450,000 Required 1. Determine the payback period for this investment. 2. Determine the break-even time for this investment. 3. Determine the net present value for this investment. Analysis Component 4. Should management invest in this project? Explain.
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