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Company OOO is evaluating a potential capital investment project with an initial outlay of $1,000,000. The project is expected to generate incremental cash flows of

  • Company OOO is evaluating a potential capital investment project with an initial outlay of $1,000,000. The project is expected to generate incremental cash flows of $300,000 per year for the next seven years. In addition to the initial investment, the company estimates it will incur $50,000 in annual operating expenses and $20,000 in annual maintenance costs. Calculate the net present value (NPV) of the project, incorporating the operating and maintenance expenses, and discuss the implications of the NPV analysis for investment decision-making.
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