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Lets take a look at the following investment project: Initial outlay = $300,000 Expected cash flows in Years 1 through 5 of $87,385 per year.

Lets take a look at the following investment project:

Initial outlay = $300,000

Expected cash flows in Years 1 through 5 of $87,385 per year.

Cost of capital:

Cost of debt 8%

Cost of preferred stock 12%

Cost of common stock 16%

Long-term debt consists of 20% of the capital structure, preferred stock 10%, and common stock 70%. Calculate the NPV of this project:

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