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Your firm has an opportunity to invest in a project that costs $991 and will return...

Your firm has an opportunity to invest in a project that costs $991 and will return two payments of 500 per year. If the interest rate is 10% what is the current NPV of this project?

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Answer #1

The current NPV of this project is computed as shown below:

= - $ 991 + $ 500 / 1.10 + $ 500 / 1.102

= - $ 123.23 Approximately

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