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    Capital Budgeting Models

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    Stern Associates is considering a project that has the following cash flow data. What is the project's payback?

    Year 0 1 2 3 4 5
    Cash flows -$1,100 $300 $310 $320 $330 $340

    If you have a 3 year loan that requires $1,000 payments each year at 7% annual interest rate what would be the present value of the loan?

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    https://brainmass.com/business/capital-budgeting/calculating-payback-period-pv-loan-464719

    Solution Preview

    Please refer attached file for better clarity of tables.

    Problem 1

    Year Cash Flow Cumulative cash flow
    1 300 300
    2 310 610
    3 320 ...

    Solution Summary

    Solutions to given problems depict the methodology to calculate payback period and present value of a loan.

    $2.19

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