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A factory costs $50,000 to build and will generate revenues of $10,000 per year forever with a 70 percent probability or $3,000 per year
A factory costs $50,000 to build and will generate revenues of $10,000 per year forever with a 70 percent probability or $3,000 per year forever with a 30 percent probability. The factory could be sold for $40,000 after one year. If the discount rate is 10%, what is the expected NPV? Multiple Choice -$6,455 $20,000 $29,000 $31,727 $50,000
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Financial and Managerial Accounting
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
12th edition
978-1133952428, 1285078578, 1133952429, 978-1285078571
