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The Quick-Start Company has the following pattern of potential cash flows for a new project. tm 0 Cash Flow After Tax luvest $100,000,000 Years2-5 $66,000,000
The Quick-Start Company has the following pattern of potential cash flows for a new project. tm 0 Cash Flow After Tax luvest $100,000,000 Years2-5 $66,000,000 year Success I .60 Test Cost Do Not lavest $20,000,000 Failure 40 NPV-3-20,000,000 Do not test If the company has a discount rate of 17%, should it test the product? Why or why not? O yes; NPV $48,632,106 O yes; NPV $21,565,903 O no NPV--$2,308,410 O yes; NPV $36,515,028 O no; NPV-$3,462,91
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