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512-10 Compute NPV--equal net cash inflows (Learning Objective 4) Woodsy Music is considering investing $625,000 in private lesson studios that will have no residual value

512-10 Compute NPV--equal net cash inflows (Learning Objective 4)

Woodsy Music is considering investing $625,000 in private lesson studios that will

have no residual value . The studios are expected to result in annual net cash inflows of

$90,000 per year for the next nine years . Assuming that Woodsy Music uses an 8% hurdle

rate, what is the net present value (NPV) of the studio investment? Is this a favorable

investment?

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