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Margaret was extremely cautious as she prepared her estimates of the cash inflows related to a new product line. The initial investment in depreciable assets
Margaret was extremely cautious as she prepared her estimates of the cash inflows related to a new product line. The initial investment in depreciable assets is $50,000 today with no salvage value. This investment is expected to generate the following net cash inflows for each of the next 5 years, where the assets all have 5-year useful lives: $16,000,$20,000,$29,000,$19,000, and $15,000, respectively. The company's required rate of return is 8%; its tax rate is 25%. Determine the NPV that Margaret initially expected for this investment. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to 2 decimal places e.g. 5,125.36. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) NPV $ By the end of year 3 , the following cash flows had been received: $10,000 (year 1 ), $15,000 (year 2 ), and $34,000 (year 3). If the final 2 years' cash flows come in as expected, will the investment's NPV surpass expectations? (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to 2 decimal places e.g. 5,125.36. Enter negative amounts using either a negative sign preceding the number e.g. 45 or parentheses e.g. (45).) Click here to view the factor table NPV \$ The investment's NPV the expectations
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