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lockhj1
Oct 20, 2012, 03:46 PM
A company plans to make and sell a new product with net cash flows of $85,000 for year 1 - 10 and -20,000 in year 11 and 95,000 in year 12. They will have to purchase new equipment at $200,000 with a 12 year life and a $20,000 salvage value. The company's required rate of return is 12%. What is the net present value?

tikitamde
Oct 20, 2012, 05:32 PM
Approximately $340k in today's terms.

ArcSine
Oct 21, 2012, 04:24 AM
Fortunately, Tikitamde, do-overs are allowed around here. You'll want to take one on your calculation. Also, have a glance at the forum's homework-help rules when you have a moment.