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Which of the following three investments will have the highest NPV? All three cases require an initial investment of $45,000, and the required rate of
Which of the following three investments will have the highest NPV? All three cases require an initial investment of $45,000, and the required rate of return is 10%.
A | B | C | |
Year 1 net cash in | 12,000 | 27,000 | 42,000 |
Year 2 net cash in | 22,000 | 27,000 | 32,000 |
Year 3 net cash in | 32,000 | 27,000 | 22,000 |
Year 4 net cash in | 42,000 | 27,000 | 12,000 |
Total cash flow | 108,000 | 108,000 | 108,000 |
A. Investment B | ||
B. Investment C | ||
C. Investment A | ||
D. All three investments will have the same NPV |
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