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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
The Horizon Company will invest $88,000 in a temporary project that will generate the following cash inflows for the next three years. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.
| Year | Cash Flow | |||
| 1 | Â | $ | 24,000 | Â |
| 2 | Â | Â | 32,000 | Â |
| 3 | Â | Â | 61,000 | Â |
| Â | ||||
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| The firm will also be required to spend $12,000 to close down the project at the end of the three years. |
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| a. |
Compute the net present value if the cost of capital is 8 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.) |
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| Â Â Net present value | $ |
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