Homework Answers
Answer:
Qustion 1)
Given
Cash Flow in Year 0 CF0=-230000
Cash flow from Year 1 to Year 5 CF =$60000
Interest rate r=12%
N=5 years
NPV= CF*(1-(1+r)^-N)/r + CF0=60000*(1-(1+12%)^-5)/12% -230000=-$13713.43
Since we are getting negative NPV so the project is not good for acceptance.
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