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The ABC Corp. is evaluating a proposal for a new project. Itwill cost RM55,000 to get the undertaking started. The project willthen generate cash inflows of RM21,000 in its first year andRM17,000 per year in the next five years after which it will end.ABC uses an interest rate of 9% compounded annually for suchevaluations. Calculate the “Net Present Value” (NPV) of the projectby treating the initial cost as a cash outflow (a negative) in thepresent, and adding the present value of the subsequent cashinflows as positives
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