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Capital Budgeting Analyses (i). Consider a ten-year project that costs $40,000 today, which is expected to generate $5,000 at the end of the second year
Capital Budgeting Analyses
(i). Consider a ten-year project that costs $40,000 today, which is expected to generate $5,000 at the end of the second year and then the cash flows will increase by $1,500 every year for the following three years and then stagnate for the rest of the project life. The cost of capital is 7 percent. What is the projects NPV? What is the discounted payback period?
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