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Hiram Finnegan Inc. is considering a capital investment project. This project will cost $10 million today. Managers expect that net cash flows will be $15
Hiram Finnegan Inc. is considering a capital investment project. This project will cost $10 million today. Managers expect that net cash flows will be $15 million at the end of year 1 and $40 million at the end of year 2. After year 2, the project will be finished. The appropriate annual discount rate for projects of this risk is 12% per year. What is the net present value of this project? Should the firm accept this project? (Choose the best answer.) O $10.0 mil.; reject because NPV 0. O $35.3 mil.; accept because NPV > 0. O $45.3 mil.; accept because NPV > 0. O-$45.0 mil.; reject because NPV
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