1. A factory will produce a cash inflow, net of all the expenses, of $10,000...
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1. A factory will produce a cash inflow, net of all the expenses, of $10,000 a year at the end of each of the next 3 years and then is sold for $100,000, right after it returns its last cash inflow. (Hence: Cash flows are 10K, 10K, 10K and 110K respectively in years 1-4.) The opportunity cost of capital (also known as the required rate) is 10 percent.
a) What is the present value of this factory (i.e., its cash flows)?
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