1. Cash flow Suppose you will need to invest 20,000 in a project. You won’t have any...
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1. Cash flow
Suppose you will need to invest 20,000 in a project. You won’thave any income for the first 4 years. Starting from year 5, youwill receive 9,000 each year for the next 5 years. Your requiredrate of return is 10%. Would you take this project or not? Why?
1. Cash flow
Suppose you will need to invest 20,000 in a project. You won’thave any income for the first 4 years. Starting from year 5, youwill receive 9,000 each year for the next 5 years. Your requiredrate of return is 10%. Would you take this project or not? Why?
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Evaluation of Investment proposal using NPV Decision Rule Present value of future cash flows Present value of future cash flows CF51 r4 CF61 r6 CF71 r7
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