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This Question: 1 pt Consider the following two projects: Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Discount Pro
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Answer #1

Initial cash flows for Project Beta = $80

Present value of cash inflows = [$25/(1.13)1] + [$25/(1.13)2] + [$25/(1.13)3] + [$25/(1.13)4] + [$25/(1.13)5] + [$25/(1.13)6] + [$25/(1.13)7]

Present value of cash inflows = $25 * 4.42261 = $110.57 or approximately $111

Present value of cash inflows = $111

Net Present value = $111 - $80

Net Present value = $31

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