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Daisy Doilies Co. has a project that will cost $1,000 to start, but will make $450 its first year, 5500 its second year, and

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Answer #1

Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=450/1.19+500/1.19^2+550/1.19^3

=1056.79

NPV=Present value of inflows-Present value of outflows

=1056.79-1000

=$56.79(Approx)

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