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Question 1: Net Present Value A 10-year project with an initial investment of 100,000 AED. The income from the project for the first year is

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Question 1: Net Present Value A 10-year project with an initial investment of 100,000 AED. The income from the project for the first year is AED 40,000 and it will increase by 10% over the next 9 years. The annual cost for the first year is AED 5,000 and it will increase by 5% over the next 9 years. 1. Calculate the NPV of the project which requires a rate of return of 15% and an inflation rate of 2% per year. 2. What is the payback of the project? What is the disadvantage of this method

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