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    Cash flows and NPV

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    A Restaurant is analyzing a project that requires $180,000 of fixed assets. When the project ends those assets are expected to have an after-tax salvage value of $45,000. How is the $45,000 salvage value handled when computing the net present value of the project?

    a. reduction in the cash outflow at time zero
    b cash inflow in the final year of the project
    c cash inflow for the year following the final year of the project
    d cash inflow prorated over the life of the project
    e not included in the net present value

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    https://brainmass.com/business/capital-budgeting/cash-flows-and-npv-332236

    Solution Summary

    The solution explains the correct alternative in respect of cash flows and NPV

    $2.19

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