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Raj's Lunch Counter is expanding and expects operating cash flows of $20,200 a year for 5 years as a result. This expansion requires $51,000 in
Raj's Lunch Counter is expanding and expects operating cash flows of $20,200 a year for 5 years as a result. This expansion requires $51,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $4,600 of net working capital throughout the life of the project. What is the net present value of this expansion project at a required rate of return of 12 percent?
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