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3. You are analyzing a project and have gathered the following data: Cash flow -$275,000 S40,200 $31,800 $72,000 $80,000 Y ear 0 2 4 What is the NPV of this project if the required rate of return is 14 percent? Should this project be accepted?

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Answer #1
NPV:
Year Cashflows PVF at 14% Present Value
0 -275000 1 -275000
1 40200 0.877193 35263.16
2 31800 0.769468 24469.07
3 72000 0.674972 48597.95
4 80000 0.59208 47366.42
5 45000 0.519369 23371.59
NPV: -95932
Hence, the project shall not be accepted as NPV is negative
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