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(NPV with varying required rates of return​) Gubanich Sportswear is considering building a new factory to...

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Finance

(NPV with varying required rates of return​) Gubanich Sportswearis considering building a new factory to produce aluminum baseballbats. This project would require an initial cash outlay of​$4,000,000 and would generate annual free cash inflows of​$1,000,000 per year for 7 years. Calculate the​ project's NPV​given:

a. A required rate of return of 9 percent

b. A required rate of return of 11 percent

c. A required rate of return of 15 percent

d. A required rate of return of 16 percent

Answer & Explanation Solved by verified expert
3.8 Ratings (747 Votes)
NPV Rt 1 it t varies from 1 to nwhereRt Cash flow netted Inflow Outflowduring the period ti Discount ratet number of periodsHence we can use the above formula to construct followingtableCase ADiscount Rate    See Answer
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