Computing NPV
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I am trying to decide whether to accept a project, the estimated after-tax cash flows are:
Year 0 - ($50,000)
Year 1 - $25,000
Year 2 - 20,000
Year 3 - 10,000
Year 4 - 7,500
The required rate of return is 10%.
What is the net present value and should I accept the project?
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Solution Summary
This solution is comprised of a detailed explanation to answer what is the net present value and should I accept the project.
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NPV is calculated by finding the present value of each cash flow, including both cash inflows and outflows, discounted at the project's required rate of return.
NPV = sum of CFt where CF ...
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