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    Capital Budgeting: Net Present Value Calculation

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    An investment will pay $700 at the end of each of the next 4 years, $600 at the end of Year 5, and $500 at the end of Year 6. What is its present value if other investments of equal risk earn 10 percent annually?

    a. $1,016.05
    b. $2,201.45
    c. $1,132.90
    d. $3,545.45
    e. $2,873.70

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    Solution Summary

    This solution provides a detailed, step-by-step explanation of the given capital budgeting problem.