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You are reviewing a capital budgeting proposal for your company. Your company is considering investing in new equipment. The details of the proposal are as
You are reviewing a capital budgeting proposal for your company. Your company is considering investing in new equipment. The details of the proposal are as follows: The net investment outlay is $580,000 The investment will generate $275,500 in after-tax incremental cash flow at the end of each of the next 5 years. . .At the end of the fifth year, there will be an after-tax terminal cash flow of $138,500. The weighted average cost of capital for this project is 12%. The net present value of the investment is closest to: A) $335,378 B) $483,284 C) $491,704 D) $936,000 E) $1,651,70
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