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Top Spin company is considering investing in a roof-top solar network to generate its own power. Assume that the expected ann
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Answer #1

5 Date Cashflow 3 01/04/15 01/04/16 01/04/17 01/04/18 01/04/19 01/04/20 -150000 50000 50000 50000 50000 50000 - 5 Formula ofSolution to Part (a):

NPV of a project =[ 50000 PVIFA ( 18%, 5) - Initial Investment ]

= [ 156358.55 - 150000 ]

= $6358.55.

Since, the NPV of a project is positive it is expected to create shareholder's value, therefore, the above project should be accepted.

​​​​​​Solution to Part (b):  It is worked out and uploaded above.

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