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NPV Calculation

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A project requires a $5000 cash investment at the beginning of year 1. This project will produce a $2000 cash income at the end of each of years 1-4. Using appropriate annual discount factors set up a simple table showing data and a calculation of the NPV of this cash flow discounted at 10%.

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Solution Summary

Net Present Value of an investment project is calculated.

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($5,000) $2,000 $2,000 $2,000 $2,000
10%
NPV = $1,339.73 ...

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