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Rossiter Restaurants is analyzing a project that requires $180,000 of fixed assets. When the project ends, those assets are expected to have an aftertax salvage
Rossiter Restaurants is analyzing a project that requires $180,000 of fixed assets. When the project ends, those assets are expected to have an aftertax salvage value of $45,000. How is the $45,000 salvage value handled when computing the net present value of the project?
Excluded from the net present value calculation. | ||
Cash inflow for the year following the final year of the project. | ||
Reduction in the cash outflow at Time 0. | ||
Cash inflow in the final year of the project. | ||
Cash inflow prorated over the life of the project. |
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