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Obj. 3 Keystone Healthcare Corp. is proposing to spend $260,820 on an eight-year project that has estimated net cash flows of $42,000 for each of
Obj. 3 Keystone Healthcare Corp. is proposing to spend $260,820 on an eight-year project that has estimated net cash flows of $42,000 for each of the eight years. a. Compute the net present value, using a rate of return of 10%. Use the present value of an annuity of $1 table in the chapter (Exhibit 5) Answer b. Based on the analysis prepared in part (a), is the rate of return (1) more than 10%, (2) 10%, or (3) less than 10%? Explain. c. Determine the internal rate of return by computing a present value factor for an annuity of $I and using the present value of an annuity of $1I table presented in the text (Exhibit 5)
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