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Star Cruise has a project that requires an initial cash outflow of Php500,000 with a life of eight years and a salvage value of Php20,000
Star Cruise has a project that requires an initial cash outflow of Php500,000 with a life of eight years and a salvage value of Php20,000 upon its retirement. Annual cash inflow before tax amounts to Php100,000 and a tax rate of 30% will be applicable. The required minimum rate of return for this type of investment is 8%. The present value of 1 and the annuity of 1, discounted at 8% for 8 periods are 0.54 and 5.747, respectively. Salvage value is ignored in computing depreciation. What is the net present value (NPV)?
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