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Discounting a future cash inflow at an 8% discount rate will result in a higher present value than discounting it at a: Multiple Choice 7%
Discounting a future cash inflow at an 8% discount rate will result in a higher present value than discounting it at a: Multiple Choice 7% rate. 8% rate. 9% rate. all of the answers are correct. Advanced Digital Design is analyzing a capital investment project for using new computing technology to reduce current operating costs. The new computing technology will have a five-year life with no salvage value at the end of five years. Advanced Digital Design's cost of capital is 12%. Relevant cash flows and present value factors for 5 years @ 12% are as follows: Investment in computer technology = $500,000. Annual net cash savings from new computer technology = $135,000. Salvage value of new computer technology = $0. Present value of $1 = 0.5674 Present value of an annuity of $1 = 3.6048 When considering the net present value of the investment in new computing technology, which one of the following represents a possible internal rate of return on the investment? Multiple Choice 10%. o 12%. 14%. none of the answers are possible
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