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A project requires an investment of $900 today. It can generate sales of $1,100 per year forever. Costs are $600 for the first year and
A project requires an investment of $900 today. It can generate sales of $1,100 per year forever. Costs are $600 for the first year and will increase by 20 percent per year. (Assume all sales and costs occur at year-end). The project will be terminated at the end of the year before costs exceed revenues. Ignore taxes and calculate the NPV of the project at a 12 percent discount rate.
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