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Ann [662]
4 years ago
8

A project has cash flows of -$119,000, $52,800, $60,200, and $33,100 for years 0 to 3, respectively. The required rate of return

is 12 percent. Based on the net present value of _____, you should _____ the project.
Business
1 answer:
Olegator [25]4 years ago
4 0

Answer:

-$306.15 and rejected

Explanation:

Year     Cash flows Discount factor  Present value

                                at 12%

0          $-119,000 1                              $-119,000  (A)

1          $52,800 0.8928571429 $47142.86

2          $60,200 0.7971938776 $47,991.07

3          $33,100      0.7117802478         $23559.93

Sum                                                         $118,693.85 (B)

Net present value                                -$306.15 (A - B)

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