Homework Answers
Informarion given:
i = Discount rate = 11%
n= number of years = 5
R = expected cashflows = $70,000
Cost = $260,000
PVA = R(PVAF n, i)
= $70,000 * (3.696)
Total PVA = $258720
- cost = $260,000
= NPV ($1280) (negative value)
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11%
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