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Question 2 From a project we could expect to obtain net revenues of $650,000 per year for at least the next 10 years, if we
Question 2
From a project we could expect to obtain net revenues of $650,000 per year for at least the next 10 years, if we adapt our production line, in order to produce some new parts. Considering this situation
- What is the maximum that we should invest on this project if we consider a cost of capital of 4%?
- If this project required an initial investment of $4,000,000, what would be its NPV consider a cost of capital of 4%?
- What is its payback period given that the initial investment is $4,000,000?
Question 3
Considering that our plant produces annual revenues of $260,000 decreasing at a 1,2% annual, and it is expected to last for a very long time.
- For how would investors buy the plant if they wanted to obtain a profitability of at least a 6%?
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