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    lockhj1's Avatar
    lockhj1 Posts: 1, Reputation: 1
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    #1

    Oct 20, 2012, 03:46 PM
    Net Present Value
    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's Avatar
    tikitamde Posts: 1, Reputation: 1
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    #2

    Oct 20, 2012, 05:32 PM
    Approximately $340k in today's terms.
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
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    #3

    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.
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