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Compute the NPV; should project be accepted

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Lynch's Bakery is planning on a addition. It will have an initial cost of $25,000 and expects to receive at the end of each year, including year 1, $1,000 for 5 years. It has a 15% cost of capital.

a) Compute the net present value
b) Should the project be accepted?

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Solution Summary

The expert computes the NPV and whether it should be accepted.

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