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Hamilton Control Systems-NPV of a temporary project

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Hamilton Control Systems will invest $90,000 in a temporary project that will generate the following cash inflows for the next three years

Year 1: $23,000
Year 2: $38,000
Year 3: $60,000

The firm will be required to spend $15,000 to close down the project at the end of three years. If the cost of capital is 10 percent, should the investment be undertaken? Use the net present value method.

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Solution Summary

The NPV of a temporary project of Hamilton Control Systems is calculated.

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Hamilton Control Systems will invest $90,000 in a temporary project that will generate the following cash inflows for the next three years

Year 1: $23,000
Year 2: $38,000
Year 3: $60,000

The firm will be required to spend $15,000 to close down the project at the end ...

Purchase this Solution


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