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Assume that a conventional cash flow (i.e. cash outflow in the beginning and all cash inflows afterwards) investment opportunity costs $50,000 to set up and
Assume that a conventional cash flow (i.e. cash outflow in the beginning and all cash inflows afterwards) investment opportunity costs $50,000 to set up and it has a payback period of 8 years. Suppose that the required return is 10%. What is the worst-case NPV and the best case NPV?
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