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The owner of a hair salon spends $1,000,000 to renovate its premises, estimating that this will increase her cash flow by $220,000 a year for
The owner of a hair salon spends $1,000,000 to renovate its premises, estimating that this will increase her cash flow by $220,000 a year for the first 2 years, $200,000 in year 3, and $220,000 in years 4 and 5. If her discount rate is 6%, should she accept the project? i Yes, because the NPV is positive at that rate. No, because the NPV is negative at that rate. Yes, because the NPV is negative at that rate. No, because the NPV is positive at that rate. Cannot be determined from the information given.
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