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Compute the net present value of the project

Corporation considering the purchase of a new machine with an initial outlay of 4000. and expected cash flows in yrs. 1-4 for 2200 per yr. The risk adjusted discount rate for the firm is 12% and the risk free rate is 5%. Compute the net present value of this project.

A. $4300
B. $2181
C. $1899
D. $1535

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Finance Basics: Compute the net present value of the project

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Compute the net present value of the project

Reference No:- TGS0677363

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : Find required deposit in order to withdraw given amount

Q : Calculate the total assets of the entity

Q : What is the company break-even point in dollar sales

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Compute the net present value of the project

Reference No:- TGS0677363

Recent Questions Asked Finance Basics

Q : Find required deposit in order to withdraw given amount

Q : Calculate the total assets of the entity

Q : What is the company break-even point in dollar sales

Q : Delicious cake factory normally sells their specialty cake

Q : Compute the net present value of the project

Q : Collected in the month of sale

Q : Problem related to genetics

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