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The following project along with its abandonment values is being considered by the project manager of the Taqwa Company. Year Cash Flows Abandonment Value 0
The following project along with its abandonment values is being considered by the project manager of the Taqwa Company.
Year Cash Flows Abandonment Value
0 -30,000 -
1 12,000 25,000
2 15,000 20,000
3 10,000 12,000
4 8,000 10,000
5 6,000 2,000
Using a cost of capital equal to 14 percent, determine the optimal economic life of the project.
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