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Your initial calculation of the NPV of a five-year project is $100. However, the CEO points out that you have forgotten to incorporate information about
Your initial calculation of the NPV of a five-year project is $100. However, the CEO points out that you have forgotten to incorporate information about additional credit lines that you have agreed to extend to customers. Specifically, if the project is taken, the level of your Accounts Receivable will increase today by $100. Assuming the relevant occ is 8 percent, what is the corrected NPV when this is taken into account?
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