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Several companies, including Orange Valley Technology and Silver Sun Banking, are considering project A, which is believed by all to have a level of risk
Several companies, including Orange Valley Technology and Silver Sun Banking, are considering project A, which is believed by all to have a level of risk that is equal to that of the average-risk project at Orange Valley Technology. Project A is a project that would require an initial investment of 4,143 dollars and then produce an expected cash flow of 9,561 dollars in 8 years. Project A has an internal rate of return of 11.02 percent. The weighted-average cost of capital for Orange Valley Technology is 9.73 percent and the weighted-average cost of capital for Silver Sun Banking is 11.69 percent. What is the NPV that Silver Sun Banking would compute for project A?
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