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BE25.6 Quillen company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $250,000 and
BE25.6 Quillen company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $250,000 and would have a useful life of 9 years, zero salvage value, and would result in net annual cash flows of $46,000 per year. Now that the investment has been in operation for 1 year, revised figures indicate that it actually cost $260,000 , will have a total useful life of 11 years (including the year just completed) , and will produce net annual cash flows of $39,000 per year. Evaluate the success of the project. Assume a discount rate of 10%. (Please indicate which TVM table you are going to be using and what is the interest factor.)
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