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Example: A project costs $2,000 today and has an opportunity cost of capital of 10%. It has a 2 year life. It will produce cash
Example: A project costs $2,000 today and has an opportunity cost of capital of 10%. It has a 2 year life. It will produce cash revenues of $1,500 and $500 in Years 1 and 2 respectively. The asset can be depreciated at $1,000 per year.
Compare the NPV using cash flows, to the NPV using accounting income.s
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