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Nataly_w [17]
3 years ago
7

Your storage firm has been offered 100,000 in one year to store some goods for one year. Assume your costs are $95,000, payable

immediately, are the cost of capital is 8%. Should you take the contract?
Business
1 answer:
Alexandra [31]3 years ago
8 0

Answer:

We should not take the contract

Explanation:

Net present value = Initial investment + Present value of cash inflows

Net present value = -95000 + 100000/1.08

Net present value = -2407.41

Thus, the contract should not be taken because the NPV is negative

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