Question
. You are thinking of investing in an ice cream business while in college. Project inflows are expected to be $200 per year, and project
. You are thinking of investing in an ice cream business while in college. Project inflows are expected to be $200 per year, and project outflows are expected to be $140 per year. These cash flows will begin in one year and will last for a total of two consecutive years. The project will require an immediate investment in an ice cream machine that costs $60 and will be depreciated for two years on a straightline basis to zero. There is no salvage value. Projects of similar risk offer a 25% required return. Your tax rate is 30%. Which of the following comes closest to the projects net present value? A. $63.22 B. $42.00 C. $28.51 D. $13.44 E. ($28.51) need caculations
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