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2. Your company is looking at introducing a new product into its product line. Your company expects that this new product wou
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Answer #1

NPV of the investment=-CF0-CF1/(1+r)+CF2/(r-g)*1/(1+r)=-36-22/1.12+10/(12%-(-2%))*1/1.12
=8.13265306 million

As NPV is positive, the investment is a good investment

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