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When figuring the benefit-cost ratio, I know that I take the present value of cash inflows/ present value of cash outflows. Year 0 = (46,500)
When figuring the benefit-cost ratio, I know that I take the present value of cash inflows/ present value of cash outflows.
Year 0 = (46,500) cash flow
Year 1 = 12,200 cash flow
Year 2 = 38,400 cash flow
Year 3 = 11,300 cash flow
I'm trying to figure out what the benefit-cost ratio is for this investment at a 14.5% required return.
I got 61,900/46,500 = 1.33 BCR. Is this correct?
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