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    Question about Capital Budgeting-NPV

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    Your firm is looking at a new investment opportunity, Project Alpha, with net cash flows as follows:
    ---- Net Cash Flows ----
    Project Alpha

    Initial Cost at T-0 (Now) ($10,000)
    cash inflow at the end of year 1 6,000
    cash inflow at the end of year 2 4,000
    cash inflow at the end of year 3 2,000

    a. Calculate the project's Net Present Value (NPV), assuming your required rate of return
    is 10%

    b. On the basis of your analysis in part a, should the project be accepted or rejected?

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    https://brainmass.com/business/net-present-value/question-about-capital-budgeting-npv-206167

    Solution Preview

    Capital Budgeting-NPV
    Your firm is looking at a new investment opportunity, Project Alpha, with net cash flows as follows:
    ---- Net Cash Flows ----
    Project Alpha

    Initial Cost at T-0 (Now) ($10,000)
    cash inflow at the end of year ...

    Solution Summary

    This solution is comprised of a detailed explanation to calculate the project's Net Present Value (NPV), assuming your required rate of return is 10% and answer whether the project should be accepted or rejected.

    $2.19

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