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Assume you are a financial analyst evaluating a capital investment project for Facebook Inc. The project requires an initial investment of $10 million and is
Assume you are a financial analyst evaluating a capital investment project for Facebook Inc. The project requires an initial investment of $10 million and is expected to generate annual cash flows of $3 million for the next five years. Using a discount rate of 10%, calculate the net present value (NPV) of the project and determine whether Facebook should undertake the investment. Explain the significance of NPV in capital budgeting decisions and discuss any non-financial factors Facebook should consider.
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