1. A business is considering an investment alternative that has the following projected information:

Upfront investment cost $1,200,000

Life of investment 10 years

Minimum required rate of return 12%

Annual incremental cash flows:

Cash revenue $1,700,000

Cash expenses $1,460,000

1. Determine the annual net cash flow of the investment.

Is the answer 1,700,000 - 1,460,000 = 240,000