(NPV with varying required rates of return) Gubanich Sportswearis cons...

(NPV with varying required rates of returnâ€‹) Gubanich Sportswear is considering building a new factory to...

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