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Assume that you are looking at an investment opportunity that offers an annual operating cash flow of $40,000 per year for 4 years. The initial
Assume that you are looking at an investment opportunity that offers an annual operating cash flow of $40,000 per year for 4 years. The initial investment to purchase the necessary equipment is $200,000. You assume that you can sell the equipment at the end of 4 years for $70,000. Also, there is a need for an investment in net working capital of $15,000. If the required rate of return is 5%, and the tax rate is 35%, would you accept this project? Multiple Choice Yes, because the NPV is $3,230.00 Yes, because the NPV is $23,338.48 Yes, because the NPV is $5,500.15 No, because the NPV is $3,230.24 No, because the NPV is -$23,388.48
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