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Consider a project that requires a $200,000 initial investment. It is expected to generate $50,000 per year for five years, with the first cash flow
Consider a project that requires a $200,000 initial investment. It is expected to generate $50,000 per year for five years, with the first cash flow at the end of year two, plus a final cash flow of $75,000 at the end of the seventh year. The required return on this investment is 12%.
a. What is the projects NPV?
b. What is the projects Payback Period (PB)?
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