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XYZ Co is considering a new project. They have estimated that the project will cost $1000 initially. Cash flows from increased sales will be $500
- XYZ Co is considering a new project. They have estimated that the project will cost $1000 initially. Cash flows from increased sales will be $500 the first wear. These cash flows wil increase by 6 percent per year. The project will finish five years from now. Assume the initial cost is paid now and all revenues are received at the end of each year. All cash flows have already considered the inflation rate. If the company's investors require a 10 percent real return for such an investment and the inflation rate is expected to be 5% per year. What is the NPV of the project? answer is . $836.54
- XYZ Co is considering a new project. They have estimated that the project will cost $1000 initially. Cash flows from increased sales will be $500 the first wear. These cash flows wil increase by 6 percent per year. The project will finish five years from now. Assume the initial cost is paid now and all revenues are received at the end of each year. All cash flows have already considered the inflation rate. If the company's investors require a 10 percent real return for such an investment and the inflation rate is expected to be 5% per year. What is the NPV of the project? answer is . $836.54
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