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    Net Present Value (NPV) Calculation

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    What is the Net Present Value (NPV) of an investment project with an initial cost of $6 million and positive cash flows of $1.6 million at the end of the year 1, $2.4 million at the end of year 2, and $2.8 million at the end of year 3. Use 10% as the discount rate.

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    Solution Summary

    The solution includes both the definition of net present value and a calculation of the net present value (NPV) of an investment project.