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Consider the following investment that has these cash flows and net present value. Using the above information, what is the maximum that can be paid
Consider the following investment that has these cash flows and net present value. Using the above information, what is the maximum that can be paid for this to be a desirable investment assuming a discount rate of 6.50%? That is what is the breakeven cash flow for year 02 Round your answer to the nearest whole cent Year 0 1 Cash Flow ($18,500.00) $4,400.00 $6,250.00 $10,400.00 Discount Rate 5.50% PV Factor 1 0.94787 0.89845 0.85161 ANCF NPV: $142.73 $18,64273 Question 2 5 pts Using the table from the previous question, what is the minimum discounted cash flow in year 1 that you could accept and find the investment desirable (i.e. what is the breakeven year 1 cash flow)? Hint: You must treat year one as an unknown value and then find what value makes the overall NPV a breakeven level. This will be the value that appears in the ANCF row for year 1. Round your answer to the nearest whole cent. Question 3 5 pts From the value you found in the last question, what is the pre-discounted (raw) value? Round your answer to the nearest whole cent
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