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A project requires an initial investment of $900,000. It is expected to generate the following cash flows over its 5-year life: Year 1: $200,000 Year

A project requires an initial investment of $900,000. It is expected to generate the following cash flows over its 5-year life:

  • Year 1: $200,000
  • Year 2: $250,000
  • Year 3: $300,000
  • Year 4: $350,000
  • Year 5: $400,000

Assuming a discount rate of 9%, answer the following questions:

  1. Calculate the Present Value (PV) of each year’s cash flow.
  2. Determine the NPV of the project.
  3. Based on your NPV calculation, discuss whether the project is financially viable.

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