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Your company is considering the development of an electric bicycle. The development will take four years and cost $100,000 per year. Once developed, the company
Your company is considering the development of an electric bicycle. The development will take four years and cost $100,000 per year. Once developed, the company expects to generate a positive cash flor of $150,000 per year for ten years. The cost of capital is 10%; assume all cash flows occur at the end of each year. What is the Net Present Value of the electric bicycle? Should the company invest in this product?
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