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A fruit juice producer is considering adding a new fruit juice to its product mix. The new fruit juice will require additional capital cost of
A fruit juice producer is considering adding a new fruit juice to its product mix. The new fruit juice will require additional capital cost of $15 million. This investment is expected to generate incremental cash flows of $5 million per year for the next 5 years (i.e., year 1 to year 5). If the fruit juice producer has a cost of capital of 6%, what is the NPV of this investment? $6.1 million $10 million -S15 million $8.6 million
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