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An investment opportunity requires an outlay of 1 0 , 0 0 0 . It will yield annual returns of 2 , 5 0 0

An investment opportunity requires an outlay of 10,000. It will yield annual
returns of 2,500 per annum for each of the next 5 years (in todays terms). If
inflation is 2% and the money (nominal) cost of capital is 7.1%, the NPV of the
investment is:

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