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A factory costs $800,000. You estimate that it will produce a net cash inflow (after operating costs) of $170,000 per year for 10 years, and
A factory costs $800,000. You estimate that it will produce a net cash inflow (after operating costs) of $170,000 per year for 10 years, and it will generate a cash flow of $0 thereafter. If the relevant discount rate is 14%, what is the net present value of the factory? What will the factory be worth at the end of 5 years?
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