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Q1. A new company started a project with an initial investment of $500,000 (in year 0) followed by other yearly cash outflows to meet periodic
Q1. A new company started a project with an initial investment of $500,000 (in year 0) followed by other yearly cash outflows to meet periodic expenses and cash inflows from revenue generated as given in the table below. All cashflows are assumed to have occurred at the end of each year. Please answer the followings when the cost of capital, J. = 0.05: = 4 marks. What is the minimum revenue the company can receive every year without making any loss, i.e. at what yearly cash inflow, the company will not have a negative NPV? 3 End of Year Outflow Inflow 0 $500,000 0 1 0 $175,000 2 $150,000 $175,000 lolwl 4 $125,000 $175,000 5 0 $175,000 $175,000
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