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Applying Time Value

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A factory costs $400,000. You forecast that it will produce cash inflows of $120,000 in Year 1, $180,000 in Year 2, and $300,000 in Year 3. The discount rate is 12 percent. Is the factory a good investment? Explain.

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Is the factory a good investment? Explain.

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Manal Elkhoshkhany, MBA
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  • BA, Ain Shams University, Cairo Egypt
  • MBA, California State University, Sacramento
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