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A company is evaluating an investment which has an initial investment of $4,000. Annual net cash flows are expected to be $2,000 over the next
A company is evaluating an investment which has an initial investment of $4,000. Annual net cash flows are expected to be $2,000 over the next three years. The company requires a 10% annual return. The present value of $1 factor for 10% and 1 period is 0.9091; 2 periods is 0.8264; and for 3 periods is 0.7513. The break-even time is between:
3 and 4 years
1 and 2 years
0 and 1 year
2 and 3 years
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